NEW YORK (TheStreet) -- It's true for every analyst -- every once in a while you will come across a company that you've beaten up, only to find yourself defending them later. That's where I've arrived with high-end electric vehicle company Tesla (TSLA - Get Report).
Ever since the New Jersey Vehicle Commission voted Tuesday to ban Tesla from direct-selling of its vehicles, investors feared the worst.
After the stock closed down roughly 2% Tuesday to $232.41, the shares rebounded Wednesday to close at $241.49, up 3% since the ruling was announced. Investors were feeling better knowing that although Tesla may have driven out of New Jersey, the stock wasn't going to fall off a cliff. But it's not time to get complacent.
The ban takes effect on April 1. It's at that point that Tesla must stop all direct-selling within the state. Given that New Jersey is home to some of the most luxury-hungry auto markets, Tesla is certain to take a hit. But it won't be anything other than a minor inconvenience.I don't want to downplay this impact. But these cars practically sell themselves. That's what CEO Elon Musk understands. How many local stores did Amazon (AMZN) have before it grew to one of the largest retailers in the country? I say this in jest, of course. But the logic still stands. Elon Musk does not need recycled salespeople to explain to customers the nuances of a Model S. Tesla markets to sophisticated shoppers. And don't think for a moment that these shoppers won't find some other means to get into the driver's seat of their chosen model. There's a reason why the automaker is increasing production. Even more impressive is that profits are increasing. To those who are unable to explain why the stock is rising -- these are two excellent reasons. Sure, there's been some irrational exuberance at times. But it's tough not to want to latch your hitch to Elon Musk, whom many revere as the next Steve Jobs. For that matter, where was Apple (AAPL) ten years ago? (Here's a hint: the shares have gone up 3,750% in that time frame.) Likewise, expensive or not, investors are buying this stock on the assumption that Tesla will continue to grow its revenue. From my vantage point, the 10-year revenue ramp looks solid, given the company's recent predictions and plant constructions.