The rating is six notches below investment grade and falls in the junk category. This is an unsolicited rating with no input from Tesla regarding its future plans, according to Zacks.
S&P assigned a stable outlook to the rating, which indicates low possibility of a rating upgrade or downgrade in the near term. The outlook is based on the projections that gross margins of Tesla will continue to improve over the next year, as the company works to fulfill the demand for Model S, Zacks noted.
TheStreet Ratings team rates TESLA MOTORS INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate TESLA MOTORS INC (TSLA) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and poor profit margins."