Goldman Sachs analyst Brian Lee upgraded SolarCity (SCTY) to a buy rating and raised his price target from $65 to $80 a share. He wrote that the main reason for this upgrade is that companies with a presence in the rooftop niche market will perform very well. He also said that the fundamentals of the solar industry are very solid. All this is fine, but the question is, how much do you have to pay for the "solid fundamentals" of the industry and the company? There are many solid sectors and companies out there, but investors don't pay an arm and a leg. Don't fundamental valuations mean anything anymore? According to Goldman, probably not. Let me remind readers that SolarCity is not a cheap stock. It does not have any earnings, it has consistently lost money, and it is trading at pie in the sky valuations. More specifically, SolarCity trades at a Price/Sales ratio of 35, and on a tmm basis, its profit margins are -38%, operating margin is about -71% and return on equity stands at -34% (data from Yahoo ).