Goldman Sachs analyst David Tamberrino previewed Tesla Motors (NASDAQ: TSLA) Q2 earnings due on Wednesday 8/1. The analyst said key focus areas revolve around (1) sustainability of Model 3 production, (2) pace and demand-variants of Model 3 order conversion, (3) margin improvement potential, and (4) FCF burn.

Tamberrino also highlighted that in collaboration with the Goldman Sachs Data Works team they introduce a new analysis on Model 3 sentiment based off social media posts. The data potentially points to waning customer enthusiasm for the vehicle as order availability and test drives have increased, he said.

From the data, they see a few trends:

1. Weekly posts about the Model 3 are declining: with 2016 averaging 1. 4,400/week, 2017 averaging 3,900/week, and YTD 2018 averaging 3,000/week;
2. Positive skew has faded: with 2016 carrying a +18% positive skew, 2017 a 12% positive skew, and YTD 2018 tracking at a 4.5% positive skew;
3. With the recent increased availability of the Model 3 and increased production, we note a lack of peak (which would indicate significant buzz around the product) in social media posts;
4. Lastly, we find that sentiment has recently declined from a slightly positive skew (i.e., from +5% in 1H18) to a slightly negative skew the past few weeks 0 corresponding with the time period where the vehicle began to hit stores and orders were opened to all.

Given news flow around 2Q18 deliveries/production, Model 3 production, Model S/X price increases abroad, FX headwinds, and SG&A headcount reductions, the firm's near-term 2018/2019 EBITDA forecasts up by 11% on average, but their 2020/2021 EBITDA estimates down by 6% on average.

Commenting on Model 3 production, the analyst notes TSLA had 56k VINs registered and produced 41k Model 3s), and believe this implies that TSLA has produced approx. 15k vehicles in the past four weeks. This essentially equates to a production figure of approx. 4,000/week, he notes.

The firm forecast the quarter-ending cash balance to be approx. $2.2 billion and still expects the company to order to maintain a cash balance above $2 billion.

The firm maintained a Sell rating and price target of $195.

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Shares of Tesla Motors closed at $295.50 yesterday.