Tesla Inc. (NASDAQ: TSLA) has long been the source of much controversy on Wall Street. Fundamentally speaking, how can a company that loses this much money have such a high valuation? Some would argue that if we look far enough into the future that the profits that will be realized then by the innovations taking place now are worth the loss in the meantime. Although this might be a simplistic explanation, analysts seem to be split on whether or not it this is the case.

For now, analysts are looking at Tesla’s production numbers and whether Elon Musk can drive this company’s bread-and-butter product forward. Considering recent strong orders for Tesla’s Model 3, one independent research firm took this opportunity to issue an updated call on the electric car manufacturer.

Argus upgraded Tesla to a Buy rating with a $444 price target, implying an upside of 25% from the most recent closing price of $355.17. The upgrade reflects recent strong orders for the Model 3, which is expected to reach the market in the fourth quarter. The company is currently receiving about 1,800 Model 3 orders per day — without any advertising or other marketing campaigns.

Although the ramp-up of the Model 3 will boost labor and overhead costs in the near term, Argus expects these additional costs to diminish over the course of 2018. As such, the firm believes that Tesla will be able to reach its 25% gross margin target on the Model 3 late next year, in line with the margins already achieved on the Model S and Model X.

The firm also narrowed its 2017 loss estimate to $5.36 from $5.48 to reflect the second quarter results, which topped Argus’ forecast by $0.12. The revised estimate assumes stronger gross margins over the remainder of 2017, with continued sales growth for all three models. Consensus estimates from Thomson Reuters call for a net loss of $6.27 per share and $11.76 billion in revenue for the coming year.

Argus raised its 2018 estimate to breakeven from a loss of $0.50 per share, reflecting its expectations for lower expenses and higher sales. The firm is now looking for Tesla to reach breakeven two quarters earlier than Argus previously expected and to achieve full-year profitability in 2019.

Excluding Tuesday’s move, Tesla has outperformed the broad markets in the 2017, with the stock up 66% year to date. Over the past 52 weeks, the stock is up 54%.

Shares of Tesla were last seen up 3% at $367.20, with a consensus analyst price target of $313.24 and a 52-week range of $178.19 to $386.99.

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