Wall Street still doesn’t understand Tesla.

Several top firms are telling their clients they are skeptical on company’s Model 3 production ramp and future capital needs even as the shares continue to surge higher.

Tesla shares rallied 7 percent in Thursday’s premarket session after the electric car maker posted a narrower-than-expected second-quarter loss Wednesday.

“We were surprised by the after hours move in TSLA shares and continue to be cautious on the stock, especially as the risk profile shifts from the hype of the Model 3 to execution, or ‘production hell’ as Elon Musk refers to it,” Cowen analyst Jeffrey Osborne wrote Thursday in a note to clients. “We believe Tesla shares are an overvalued show me story.”

Osborne reaffirmed his underperform rating and raised his price target for Tesla to $170 from $155, representing 48 percent decline from Wednesday’s close.

Analysts emphasized Tesla’s future capital needs as the company scales up its production of the Model 3. Management forecast it will be able to produce 10,000 vehicles per week sometime next year.

“As Tesla’s Model 3 ramp proceeds, we continue to have more questions than answers about the company and the vagueness of details coupled with lack of disclosure from management about true capital needs and expense levels need to obtain their ultimate vision,” Osborne added.

Goldman Sachs agreed Telsa will need to raise new funds sooner than expected.

“We now see TSLA needing to raise capital in 1Q18E (vs. 2Q18E previously) and continue to see downside risk to Model 3 production,” Goldman analyst David Tamberrino wrote Thursday.

Tamberrino maintained his sell rating and increased his six-month price target to $200 from $180 on Tesla shares.

Morgan Stanley was also stunned how much Tesla is forecasting to spend in the second-half of this year.

“Early Model 3 launch milestones look strong, but the $2bn of 2H capex will make your eyes water. Time will tell if they are tears of joy … 2H capex guide of $2bn is really big. 2x our forecast,” Morgan Stanley analyst Adam Jonas wrote Wednesday.

Jonas reiterated his equal-weight rating and his $305 price target for the stock.

Tesla CEO Elon Musk said on the earnings conference call with analysts the company is not “considering an equity raise” at this point, but may do a debt offering, according to a FactSet transcript.

The company has been one of the best-performing stocks in the market this year. Its shares rallied 52.5 percent year to date through Wednesday versus the S&P 500’s 10.7 percent return.

Tesla did not immediately respond to a request for comment.

— CNBC’s Michael Bloom contributed to this story.