It’s been extraordinarily difficult for analysts and pundits to forecast the performance of Tesla (NASDAQ:TSLA) stock.

Some very smart people have tried (quite unsuccessfully of course) to short the shares over the years. And, conversely, TSLA stock’s slump in the first seven and a half months of this year surprised many bulls.

My Poor Record on Tesla

I’ve been among those who historically have had difficulties predicting the stock’s performance. Over the years, I’ve been pretty bearish on the shares, although I never advocated shorting TSLA stock and, in December 2020 I wrote:

“I’ve realized that Tesla’s brand became so strong that it will almost definitely keep the majority of its EV market share. Meanwhile, the American automaker made big inroads in the huge Chinese EV market.”

In the same column, I stated that “Tesla can make a great deal of money by charging extra fees for subscription services it can offer the buyers of its vehicles.”

Still, I was more bullish on Ford (NYSE:F), GM (NYSE:GM), Electramechannica Vehicles (NASDAQ:SOLO) and Ayro (NASDAQ:AYRO) than Tesla.

I think the biggest reason why it’s been so difficult to make predictions about TSLA stock is that the automaker, more than any other company I can think of, has a combination of extremely potent strengths; critical, important weaknesses; and huge, dangerous threats.

Indeed, to say that Tesla is a “mixed bag” is a huge understatement. One could say that Tesla is almost like the (apropos for Halloween) Dr. Jekyll and Mr. Hyde of tech stocks. And the bulls focus on the company’s powerful strengths and huge opportunities, while the bears are fixated on its potentially debilitating weaknesses and fear-inducing threats.

Here are some of Tesla’s most impressive strengths and glaring weaknesses/threats.

A Tremendously Strong Brand and Impressive Innovations

As I noted earlier in this article, I had written in my previous column that the automaker’s brand had become extremely strong.

That strength, I believe, was the key reason why Hertz (OTC:HTZZ) ordered 100,000 of Tesla’s Model 3 electric vehicles. Announced on Oct. 25, Hertz’s decision sparked an explosive rally in TSLA stock, taking its shares to an all-time high and a market capitalization of over $1 trillion.

The auto rental company probably believes (and it’s likely correct) that, by offering many Tesla vehicles, it will spur a multitude of consumers who are Tesla fans and eager to rent the Model 3 to pick Hertz over its competitors.

In light of the huge amount of positive media coverage that Tesla CEO Elon Musk and the automaker itself receives, the company’s brand is likely to remain extremely powerful for the foreseeable future.

And Tesla deserves a great deal of credit for its innovations, including its software updates, large charging network, high-range batteries and, of course, its spearheading of the renaissance of EVs.

In light of its innovative nature, I’m confident that the company will be among the earliest to launch and exploit the “subscription services” that I mentioned in my last article on Tesla.

Technical Issues and Very Threatening Competition

If the Hertz deal had not been unveiled on Oct. 26, the lead story about Tesla would have been the automaker’s decision to “roll back” a new, beta version of its Full Self-Driving (FSD) driver assistance software. The beta version of the software “had apparent bugs,” one owner of a Tesla vehicle that was updated reported, in CNBC’s words.

In the past, there have been other problems reported with the FSD system. Among these are “vehicles missing turns, scraping against bushes, and heading toward parked cars,” Consumer Reports noted in July.

During the following month, Vox reported: “the Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) announced that it would investigate safety problems in Autopilot, Tesla’s advanced driver assistance technology.”

And unlike a number of other companies, including GM, Ford, and Alphabet (NASDAQ:GOOG,NASDAQ:GOOGL), Tesla also has not yet tested autonomous vehicles on public roads.

In the U.S., the automaker has long been known for delivering vehicles with multiple minor technical issues. In China, it’s had more serious technical issues, including a huge recall due to a software glitch that may have resulted in its Autopilot system accidentally being enabled “seatbelt issues” and “suspension issues.”

On the competition front, Tesla’s share of global EV sales dropped to 13.9% in the first seven months of this year, down significantly from 17.7% during the same period a year earlier. However, Tesla’s total global EV sales nearly doubled year-over-year during the same period.

Still, my longtime thesis about Tesla losing ground as more automakers release EVs appears to be materializing. Going forward, its competition is only going to intensify as many more brands of highly advanced EVs are launched. As a result, sooner or later, Tesla’s financial results could be negatively impacted by its tough competition, causing TSLA stock to take a hit.

Valuation and the Bottom Line on TSLA Stock

Valuation is another weakness/threat for the shares in my view. With a market capitalization of over $1 trillion, Tesla is now worth about three times as much as two of the worlds largest automakers—GM and Toyota (NYSE:TM)—combined. But in 2020, Toyota sold 9.5 million vehicles, and GM sold 6.8 million automobiles, while Tesla delivered just under 500,000 vehicles last year.

The trailing 12-month price-to-sales ratio for Toyota, GM, and Tesla stock respectively are 0.92, 0.60, and 24.73.

Since I haven’t been great when it comes to making predictions on Tesla’s shares in the past, take my recommendation with a grain of salt. That said, I suggest waiting for a big pullback in the name before buying more of its sharers.

On the date of publication, Larry Ramer held long positions in Electramechannica Vehicles, and Ayro.  

Larry Ramer has conducted research and written articles on U.S. stocks for 14 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been Roku, solar stocks, and Plug Power. You can reach him on StockTwits at @larryramer.