Source: YCharts.

What: Shares of Mobileye (MBLY) took a 19.6% hit in September, according to S&P Capital IQ data, after short-seller Citron Research published a report arguing the company doesn't have the financials or performance to justify a $12 billion market valuation. 

So what: Mobileye develops software algorithms for Advanced Driver Assistant Systems (ADAS) for BMW, Tesla, Ford, and many other automakers. The company is banking on current and future semi-autonomous and autonomous car trends to fuel growth, but Citron's report highlighted a few reasons Mobileye won't necessarily benefit.

First, Citron said that while Mobileye is a "pioneer" in automotive safety, the company doesn't have any patents to protect itself from the competition or any long-term commitments from car companies that could give it an advantage. The latter part of that statement may not be entirely true, considering that Mobileye is already working with a large number of automotive companies and performing preliminary tests with others.

Citron also highlighted that major automotive suppliers Continental and Delphi Automotive are already building their own ADAS businesses. While Mobileye entered the market early, these big players have a much better chance in profiting from ADAS. Citron mentioned that Mobileye only spent $56 million in R&D over the past 18 months, far short of its competitors.

Ultimately, Citron believes "investing in this company is a 'Hail-Mary bet' on a blue-sky future that just does not exist."

Now what: As a short-seller, Citron clearly has an interest in toppling Mobileye's stock price, but that doesn't necessarily mean all of its criticisms are off base. Mobileye is fighting against larger competitors who have been in the automotive space much longer and who have deep relationships with automakers.

Mobileye points to the growing demand for semi-autonomous and autonomous vehicle systems as a sign that the company's products will be successful, but stiff government regulations could slow growth. The hype around autonomous cars is growing, and it'll bring big changes in the automotive space, but just how fast the U.S., Europe, and other countries adopt the technology is still unknown. 

Semi-autonomous and autonomous cars are likely the future of the automotive industry, but it's far too early in the game to be calling out winners in the space. And if the same logic follows, it's too early for Citron Research to be naming losers as well.