Instead, they expressed skepticism that the electric car maker would be able to combine the two companies without putting a dent in Tesla's finances — something Musk promised just hours after the proposal was announced.
"We don't expect SolarCity to have a negative impact on Tesla cash flow," Musk said on a call with analysts Wednesday morning. "This makes execution easier, not harder."
Tesla shares dropped 8 percent in morning trading Wednesday, as analysts questioned how that could be true given both companies are already struggling to prove they can turn a profit.
At the lows of the morning Tesla had lost nearly $3.2 billion in market capitalization — more than the $2.8 billion bid for SolarCity.
"The combined entity is likely to magnify the losses and cash burn that both were seeing individually," Barclays analyst Brian Johnson told investors.
By combining Barclays' earnings estimates for both companies, Johnson predicts an acquisition would lead to non-GAAP pretax losses of $1.3 billion in 2016, and $1.4 billion in 2018. More troublesome, the analyst said, is the firm's estimated cash burn for the combined companies, which it pegged at $2.8 billion in 2016 and $2.4 billion in 2018. The two companies would also have a combined net debt of $2.5 billion, Johnson said.
"In funding SolarCity's losses, it further reinforces our view Tesla will need to return to the capital markets for additional capital infusions," Johnson told investors.
According to Piper Jaffray, Solar City's 2015 revenue was $400 million, with consensus estimates predicting growth of 40 to 50 percent over the next three years. However, "sellside estimates suggest SolarCity will remain unprofitable and cash flow negative through 2018, with a net debt position of [more than] $2.8 billion," the firm said.
A separate note from Pacific Crest said Solar City's operations are expected to burn through some $400 million in cash next year, with non-GAAP losses of almost $1 billion.
Those factors could put a severe dent in Tesla's bottom line. According to Credit Suisse estimates, a deal would cause the automaker's earnings per share to decline $5.08 in 2017 and $5.29 in 2018.
After announcing the deal on Tuesday, Musk said he did not expect it to add significant debt to Tesla's balance sheet. SolarCity CEO Lyndon Rive added that his company remains on schedule to be cash flow positive in the fourth quarter.
On the Wednesday call, Musk told analysts he has "zero doubt" about the deal, and that "arguably, we should have done it sooner."