Carmaker General Motors Company (NYSE:GM) certainly doesn’t lack friends on Wall Street these days. Last week, UBS called GM stock one of its top value plays for 2018, and earlier this week RBC analyst Joseph Spak upgraded General Motors to an “Outperform,” suggesting last quarter’s strong results were the shape of things to come.

And, the two analytical firms may well be right about the company. Maybe the GM stock price target of $52 Spak has established (versus its current price of around $42) is in the cards.

On the other hand, the counter arguments hold a fair amount of water as well. Before anyone jumps all the way onto the bullish bandwagon, there are three realities to chew on.

Potential Pitfalls

Spak’s exact words? “We believe uncertainty around downturn performance has been a contributing factor weighing on the [stock’s] multiple,” but now he sees “downside resiliency.” UBS didn’t offer a specific explanation of its value-oriented case for General Motors, but with GM stock trading at a forward-looking P/E of 7.2, it’s not tough to figure out where the firm is coming from.

The points are well taken, but the arguments overlook some nuances that, if nothing else, at least need to be acknowledged as risks. Three stand out above the others. In no certain order….

1. North American Sales Are Fading

Anytime the fact that unit sales in the all-important North American market are falling is brought up, fans and followers are quick to point out that the downtrend only applies to passenger cars, not to SUVs and pickup trucks. This fact is supposed to protect GM stock.

That counterargument is fact-based too, though. Moreover, in that pickup trucks create a profit of $11,000 each for GM, whereas the company books a loss on each passenger car it sells, this changing dynamic superficially bodes well for GM stock.

It’s a question of degrees though. While pickup trucks are more profitable, they’re not profitable enough to offset all of the losses being created by its still-enormous sedan business. Pickup truck sales will make up about 16% of 2018’s automobile market.

The X-Factor few people want to talk about: As red hot as sales of pickup trucks have been for the past few years, it’s possible we’re headed into “peak pickup”… a condition where most everyone who wants a pickup truck has a pickup truck that’s new enough to suit.

2. Chinese Margins, Profit Totals Are Weak

If you think General Motors is doing well in the United States, take a look at how well it’s doing in China. The company sells 70% more cars there than it does here, capitalizing on the automobile boom underway there.

There’s an oft-overlooked footnote about its stake in China that investors must respect. That is, the cars it’s selling the most of in China (Baojun and Wuling) are low-cost vehicles that don’t drive much revenue or profits.

The average Baojun sells for less than $11,000. Wuling vehicles are similarly priced. In fact, General Motors only owns 44% of Baojun, meaning it doesn’t even get the full fiscal benefit of all the low-cost cars the company sells.

All told, only about 21% of last year’s company-wide profit of $9.4 billion came from China, despite GM’s strong presence there.

3. Competitors Are Entering the EV Market

Last but not least, while General Motors arguably took the lead from Tesla Inc (NASDAQ:TSLA) and left Ford Motor Company (NYSE:F) in the dust, on the mid-priced electric vehicle market in the United States, it didn’t develop that arm fast enough to keep would-be competitors at bay.

Not only is the Tesla Model 3 now on the market (albeit produced at a snail’s pace), Toyota Motor Corp (ADR) (NYSE:TM) recently announced it’s going to offer ten fully-electric vehicle models by 2020. China will be the first focal point for Toyota’s new EVs, though it has the United States in its sights as well, not that it matters. GM operates in both markets.

Bottom Line for GM Stock

Perhaps none of these brewing headwinds will matter in the end. Maybe truck sales in the United States will remain brisk now that new tax laws will put more money in consumers’ pockets (and at the same time stimulate the kind of economic growth that prompts purchases of pickup trucks for work-related purposes).

Maybe China’s auto market will heat up rather than continue cooling off. Perhaps General Motors will turn up the heat on electric vehicles and widen its lead on that front.

Or, maybe none of those things will happen and GM stock ends up suffering a head-on collision with reality.

It certainly never hurts to understand all the risks.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter, at @jbrumley.