NEW YORK (TheStreet) -- Shares of Tesla Motors Inc. (TSLA) are up 1.11% to $256.68 in after-hours trading after the electric automaker won a court battle in Massachusetts that clears the way for its direct-sales methodology, but faces another fight in Georgia, where dealers are trying to revoke its dealer license, the Wall Street Journal reports.
The Massachusetts Supreme Judicial Court decision comes two years after the Massachusetts State Automobile Dealers Association sued the Palo Alto, CA-based company, saying its method of using company-owned stores to sell direct to consumers, bypassing independent dealers, violated state laws, the Journal said.
The court ruled the state law only prevented competition between independent dealers and company-owned stores of the same manufacturer, and since Tesla had no independent dealers, it could continue operating its stores.
Tesla has fought dealer groups state by state to continue its direct-sales methodology, the Journal 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 robust revenue growth, solid stock price performance and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and generally higher debt management risk."