Tesla Inc. (NASDAQ: TSLA) shares have fallen off in the past month, but its first-quarter update seems to be giving investors faith. Elon Musk’s firm said in its update that it “does not require an equity or debt raise this year,” although this has analysts somewhat skeptical.

Investors may be cheering the quarterly numbers in the report, and that may account for the run that shares have seen since. But analysts are looking further ahead, and most don’t seem to like what they see.

In a report released Tuesday, Tesla said it built 34,494 vehicles in the first quarter of this year: a total of 24,728 Model S sedans and Model X crossovers and 9,766 Model 3 sedans. Total production rose 40% sequentially, and Model 3 output rose by a factor of four.

The company’s Model 3 is priced at around $35,000, well below the prices for the Model S and Model X, and Tesla and its investors are counting on the Model 3 to lead the company to the promised land of profitability.

As for the analysts, CFRA (S&P) maintained its Hold rating. The firm noted that Tesla refocused its resources in late March on production of its Model 3 vehicle, yet failed to achieve an already delayed interim target of producing at a rate of 2,500 vehicles per week; it produced just 2,020 in the last week.

While the negative news flow has continued in recent days, including the recall of 123,000 Model S sedans, CFRA’s main focus is on cash flow. Based on year-end 2017 cash of $3.5 billion, its estimate for negative free cash flow aggregating $3.35 billion in 2018 and 2019, combined with funds needed to retire $1.15 billion in debt maturing in late 2018 and in March 2019, as well as assuming a minimum $2 billion to $3 billion operational cash cushion. The firm went on to say:

We think Tesla will raise capital before March 2019. Assuming equity issuance at $250 per share, we see potential equity dilution of about 8%. Today, Tesla said it does not need a capital raise in 2018. Our Hold opinion factors in our belief that Tesla will fix manufacturing issues and accelerate its production rates.

Merrill Lynch maintained its Underperform rating and has a $180 price objective. The firm noted that slow first quarter deliveries indicate a capital raise may still be necessary even if the company pushed that out. Merrill Lynch detailed in its report:

As we have consistently argued, we believe Tesla’s consistent elevated level of cash burn and capital structure are untenable and could be challenged by increasing cost of capital, as well as investor patience that may wear thin as consistent capital raises are not met with improving earnings, returns, or cash flow.

Here’s what a few other analysts had to say:

• Evercore ISI cut its price target to $272 from $307.
• Independent Research maintained its Hold rating but lowered its target to $275 from $300.
• JPMorgan maintained its Underweight rating and lowered its target to $185 from $190.
• RBC cut its price target to $305 from $380.

Shares of Tesla were last seen up about 3.5% at $277.33, with a consensus analyst price target of $324.75 and a 52-week range of $244.59 to $389.61.

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