Tesla could be the most dangerous stock on Wall Street

Tesla shares may be up 400% this year, but one investment researcher sounds the stock's alarm.

New Constructs CEO David Trainer calls Tesla the most dangerous stock on Wall Street and says the fundamentals do not support such a high price and valuation.

"Whatever best-case scenario you want to paint for what Tesla's going to do – whether they're going to produce 30 million cars within the next ten years, and get in the insurance business and have the same high margins as Toyota, the most efficient car company with the scale of all-time – even if you do believe all that is true, the stock price is still implying that profits are going to be even bigger than that," Trainer told CNBC's "Trading Nation" on Thursday.

He notes that the stock price is implying anywhere from a 40% to 110% market share based upon the average selling price. At its current average selling price of $57,000 and assuming 10.9 million car sales by 2030, that implies 42% market share, Trainer says. Tesla trades at 159 times forward earnings.

"We think this is a big, big – one of the biggest of all time – houses of cards that are getting ready to fold," said Trainer.

He adds that its recent stock split could also prove dangerous to new investors getting into the stock.

"Stock splits are inconsequential to value. They're not changing the size; they're just dividing it up into more pieces. Honestly, I look at the stock split as a way to lure more unsuspecting, less sophisticated traders into just trying to chase this stock up, and that is not a real strategy," said Trainer.