Vertical Group analyst Gordon Johnson estimates a 66% cancellation rate for the day one Tesla Model 3 reservations of 140,000. When applying the figure to his estimate for 582,000 in gross reservations through mid-April, the analyst calculates sales in early Model 3 reservations of just 197,000. Either Model 3 cancellation rates have spiked from the “initial euphoria period” of March 31, 2016 to April 30, 2016, or new reservations have “virtually disappeared,” Johnson tells investors in a research note. He believes Tesla will exhaust all pre-orders sometime in Q1 of 2019. Model 3 sales beyond Q1 of next year will be limited by demand versus supply while growth for Tesla will likely depend on new product introductions, the analyst contends. Johnson thinks investors, as a result, will be forced to question Tesla’s “valuation as a growth stock imminently.” He does, however, expect CEO Elon Musk “to use a lot of one-time items to try to achieve profitability” in Q3 and Q4 of 2018. Profitability will rest largely on Tesla’s ability to sell a record number of zero emission vehicle credits, which may prove difficult, Johnson predicts. He keeps a Sell rating on shares of Tesla with a $93 price target. The stock closed yesterday up $2.01 to $344.78.