The problem with a pessimist is he will always figure out a way to find fault and keep crying about it.

CNBC wrote this Tuesday that “Several Wall Street firms are playing down Tesla’s Model 3 production milestone, remaining skeptical over the carmaker’s finances and demand trends.”

Few weeks back, Wall Street was screaming about how Tesla will never make it to 5000 Model 3s in a week. Now they remain skeptical about Tesla’s finances and if Tesla turns profitable or slightly profitable in the third quarter they will start talking about the long list of “one time only” items that helped Tesla during the quarter.

Goldman Sachs analyst David Tamberrino has been a Tesla pessimist for a very long time. He is a pessimist because his reasons keep changing while his bearish stance remains firm.

In March 2018, David Tamberrino forecasted Tesla to deliver 7,000 Model 3s in the first quarter and had a price target of $205. Tesla delivered 8,180. He reiterated his sell rating in April, 2018 and lowered his price target to $195.

This is what he said in April, 2018: (via CNBC)

“We believe the sustainable production rate for the second quarter of 2018 is most likely below the 2,000 vehicle mark the company achieved in the final week of the [first] quarter,” Goldman analyst David Tamberrino wrote Tuesday. “We see the company likely sustaining Model 3 production around the 1,400 per week mark”

The worst part about the assessment was David Tamberrino predicted that Tesla will be forced to raise more capital “as soon as the” third quarter if it wants to build 5000 Model 3s per week “sustainably”.

“Although the company stated that is does not require a capital raise this year, we note that this is predicated upon a sustained 5,000 per week production rate achieved exiting the second quarter of 2018,” Tamberrino explained. “Beyond a required capital raise to continue to fund the launch of the Model 3 program, the company would likely still need outside capital in the future for capacity and product expansion.”

  • Tesla is already in the third quarter.

  • Reached a burst build of 5000 Model 3s per week

  • And now its clear as a blue sky that they don’t need additional capital to sustainably produce 5000 Model 3s.

So now – Mr. David Tamberrino has turned his attention towards Tesla’s net reservations for Model 3.

“Model 3 deliveries did miss our bearish estimates and we see the incremental color on Model 3 net reservations (where the company showed its first declining data point) as incrementally negative,” analyst David Tamberrino said in a note to clients Tuesday.

Tamberrino reiterated his $195 six-month price target for Tesla shares, representing 42 percent downside to Monday’s close.”

  • Tesla said net reservations were more than 450,000 for Model 3 by the end of first quarter.

  • Tesla delivered 18,440 Model 3 in Q2 and had 11,166 vehicles were in transit.

  • According to the company, Model 3 net reservations stood roughly at 420,000 at the end of second quarter 2018.

So if you do the math, then its pretty obvious that the incremental color on Tesla’s Model 3 net reservations is not incrementally negative. Because, if I deduct 18,440 and 11,166 from 450,000 – I get 420,394.

Am I missing something here or I need a calculator?

But Goldman Sachs was not always bearish on Tesla. They had a buy rating on Tesla back in early 2016. Downgraded their rating from buy to neutral in October 2016 and moved their price target from $240 to $185.

At the time of downgrade Goldman said the combination of Tesla and SolarCity, “two high growth, high cash burn businesses” created a ” “a higher risk entity given the combined ongoing capital needs and higher net leverage that would potentially result.”

A completely fair argument as Tesla had to load up SolarCity’s debt on its balance sheet. The cyclical US Auto market was already near its peak sales levels in 2016. Tesla was loading up on debt and there was no Model 3 in production. No one really knew how many among the (nearly) half a million customers will be ready to spend two years waiting for Tesla Model 3.

I may not be an expert in stock valuation but it’s not hard to understand why Goldman decided to downgrade Tesla’s rating in the second half of 2016.

Then Goldman went from neutral to sell by February, 2017.

“The acquisition of SolarCity — which is undergoing its own business model transition — comes at a time when we believe Tesla should be singularly focused on becoming a mass automobile manufacturer.” – David Tamberrino via CNN

Tamberrino correctly predicted that Tesla’s production goals for the Model 3 were too ambitious.

But he also predicted that Tesla will hit an annualized run-rate of 100K model 3s only by the fourth quarter of 2018. Tesla has already reached that goal now, building 28,578 Model 3s in the second quarter of 2018, an annualized run rate of more than 113k Model 3s. A full three to six months before he expected.

So shouldn’t he be changing his views – as Tesla has made a material difference to his forecasts. How can a (highly possible) incremental sales of  30k to +100k cars within the time frame of his calculations make no difference to his valuation about Tesla.