Sharp 2025 Revenue And Margin SlumpA ~22% revenue drop and material margin compression in 2025 reflect weaker pricing, mix or volumes and highlight the company’s cyclicality. Such structural demand weakness can persist across quarters, reducing earnings power and pressuring cash generation for several months to quarters.
Negative Free Cash Flow In Recent YearsTwo consecutive years of negative free cash flow reduce financial flexibility, force reliance on external funding or draw on reserves, and raise quality-of-earnings concerns. Persistent negative FCF undermines the company’s ability to fund growth or withstand prolonged downturns.
Rising Financial LeverageIncreasing debt relative to equity and softer ROE weaken balance-sheet resilience. Higher leverage elevates interest and covenant risk, narrows strategic optionality for investment or buybacks, and magnifies downside if demand and margins remain pressured.