Teacher preparation programs are increasingly expected to use data on preservice teacher (PST) skills to drive program improvement and provide targeted supports. Observational ratings are especially vital, but also prone to measurement issues. Scores may be influenced by factors unrelated to PSTs' instructional skills, including rater standards. Yet we know little about how these measurement challenges play out in the preservice context specifically. Here, we investigate the reliability and sensitivity of two observational measures. We find measures collected during student teaching are especially prone to measurement issues; only 3% to 4% of variation in scores reflects consistent differences between PSTs, while 9% to 17% of variation can be attributed to the mentors with whom they work. When high scores stem not from strong instructional skills, but instead from external circumstances, we cannot use them to make consequential decisions about PSTs' individual needs or readiness for independent teaching.