Tesla Inc. (NASDAQ: TSLA) shares fell sharply on Wednesday after the company announced price reductions of $3,000 on its Model S sedan and $2,000 on its Model X SUV. Additionally, Citigroup analyst Itay Michaeli lowered its price target on Tesla to $191 per share, almost a 20 percent reduction, and maintained a “sell” rating on the company. Tesla has been under pressure as investors are becoming skeptical of the company’s ability to turn a profit and meet its lofty goals.

“The business fundamentals of Tesla always have been shaky, but the stock price has been buoyed bu the story that this a company that was going to do huge things,” said Navigant Research analyst Sam Abuelsamid. “What we’ve seem in the last month or so is people are starting to recognize maybe that wasn’t really true.”

“The recent capital raise was a positive step but won’t necessarily get the balance sheet out of the woods if Tesla cannot achieve FCF targets. So the recent reported internal memo, which seemingly called into question prior guidance, didn’t help the risk/reward calculus.” stated Michaeli. “The implications can be serious, since an automaker’s balance sheet is always subject to the confidence ‘spiral’ risk.”

“Good or bad, we think it’s important for the company to provide a more formal guidance update sooner than later,” he added. “In the meantime, we’ll look at our Model 3/Y tracker and future product/FSD rollouts for clearer demand signals in an important Q2.”