While some investors may be optimistic on Tesla’s Model 3, one Wall Street firm is concerned over the company’s ability to profitably manufacture the new vehicle.

Bernstein reiterated its market-perform rating for Tesla shares, telling investors to avoid buying the stock at its current valuation due to production risk.

“Tesla’s persistent cash burn has been a major investor controversy … In fact, Tesla may be the largest public company in history to have never generated either positive annual cash flow or positive annual profit,” Toni Sacconaghi wrote in a note to clients Wednesday. “Even if we can disregard Tesla’s cash burn, we continue to worry about the company’s ability to deliver upon its long-term vision of profitability. Specifically, we worry about whether Tesla can successfully build the mass-market Model 3: (1) with good gross margins, (2) with good quality, and (3) on time.”

Sacconaghi reaffirmed his $265 price target for Tesla shares, representing 23 percent downside to Tuesday’s close.

The analyst estimates Tesla will burn through $4.7 billion of cash this year reaching a total $10.6 billion of cash burn as a public company by the end of 2017, which is unprecedented for a nearly $60 billion market cap company.

In comparison, he cited how Amazon burned $1.1 billion of cash over three years and was generating billions of dollars of cash when it reached a $60 billion valuation. Costco burned through $1.9 billion of cash over eight years, but its value topped out at roughly $15 billion during the time period, according to the analyst.

“We believe the essential issue with Tesla’s stock is not how much cash the company burns right now, but rather how well the company can execute upon its Model 3 launch – specifically around gross margins – and demonstrate that it has a clear path to long-term profitability,” he wrote. “We are fairly bullish on the evolution of the EV [electric vehicle] market, but we worry about several near-term issues for Tesla, and would not be chasing the stock at current levels.”

Tesla did not immediately respond to a request for comment on this story. Its shares are up 62 percent this year versus the S&P 500’s 12 percent return through Tuesday.

The company’s stock rose 0.4 percent shortly after Wednesday’s market open after the report.