Tesla shares fell on Thursday after Needham & Co downgraded the stock to sell from hold, citing a possible pick-up in Model 3 cancellations.
Tesla shares dropped 2 percent in premarket trading Thursday after the note. The shares were down 8 percent in the last one month through Wednesday.
The company did not immediately return an email for comment.
Earlier this month Tesla ditched reservations and opened up Model 3 sales to anyone for a $2,500 deposit.
Gill also cited slower Model S and X sales, margin pressure, increased competition and valuation in the downgrade.
“We are downgrading Tesla to a sell from hold as we believe the stock is still overvalued despite it falling 16% from its peak set in June 2017,” the note stated.