It looks like investors aren’t actually buying the supposedly leaked email in which Tesla Motors Inc (NASDAQ:TSLA) CEO Elon Musk supposedly tells employees that the automaker could be GAAP profitable in the third quarter. It’s either that or a bearish analyst report matters more than what Musk says, which is not hard to believe because they’ve missed quite a few important targets in recent years.

Tesla Model 3
Image Credit: Tesla Motors

Tesla (TSLA) initiated at Underperform

Cowen analyst Jeffrey Osborne initiated coverage of Tesla (TSLA) stock at Underperform with a $160 price target. He believes that while the automaker is “fundamentally well positioned for the long term,” it faces sizeable execution risks for the next 12 to 18 months. His positive long-term view of Tesla (TSLA) stands in stark contrast to the view set forth by Mohnish Pabrai in his recent investor letter. Pabrai believes the automaker will continue losing money for years to come and has few good things to say about the company.

While Pabrai thinks it won’t be long before others will clone everything Tesla (TSLA) has done, Osborne believes the EV maker has a “substantial lead on its competitors.” The Cowen analyst performed proprietary research on battery chemistry and examined the growing opportunities in the stationary energy storage market. However, he sees much near-term risk due to the pending Model 3 launch and Gigafactory construction, both of which are key to Tesla (TSLA) achieving profitability.

He adds that the new initiatives in trucking and buses “seem like a stretch” due to lower volumes, longer sales cycles and heavy spending on research and development. He also believes the SolarCity acquisition is making Tesla’s story even more complex at a time when the automaker should be focusing on the Gigafactory and Model 3.

As a result of all these factors, Osborne believes Tesla (TSLA) stock will be challenging for this year and next.

TSLA is a “complete sell”

CNBC noted on Thursday that TSLA is on track to record its first negative year since going public. S&P Global Equity Chief Investment Officer Erin Gibbs told CNBC‘s Trading Nation that Tesla (TSLA) is a “complete sell.” She expressed surprise that investors aren’t more frustrated with the multiple missed targets and referred to the SolarCity deal as a “distraction” and “drain on the cash flow.”

She called attention to comments Musk made in November 2015 when he forecasted 50% to 60% growth per year, adding that a company that’s supposed to be growing that much that quickly really needs its cash flow for its own operations and not for an acquisition.

Shares of TSLA stock closed down 2.16% at $197.36 on Thursday.