Morgan Stanley analyst Adam Jonas said Tuesday that, while the Model 3 number is certainly a “hiccup” in the Tesla story, these types of delays are par for the course when it comes to vehicle launches.

Instead of focusing on one bad production month, Jonas says investors should be focusing on the quality and market reception of the Model 3, which is critical for Tesla’s future as a company. Morgan Stanley is projecting 120,000 Model 3 deliveries in 2018.

For now, Jonas said the Q3 number will have no impact on Tesla’s ability to raise the cash it needs to continue building up its infrastructure. But Tesla still has a lot to prove in the long run. Jonas said the company will need to demonstrate that it can generate positive free cash flow, something that Morgan Stanley doesn’t expect to happen until 2019.

At the same time, Jonas said Tesla’s current share price reflects a bit too much optimism.

“TSLA remains a rather expensive call option on disrupting transport and energy, but will (and should) attract serious competition over time — the stock is trading just over our assessment of fair value,” Jonas wrote.

Morgan Stanley maintains an Equal-Weight rating and $317 price target on Tesla.

Related Link: Here It Is: Your Tesla Q3 Deliveries Preview

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