Profitability WeaknessA material margin decline to ~15% and a return to net loss weakens internal funding capacity and undermines return metrics. Persistent lower margins constrain reinvestment, reduce resilience to cost shocks, and make long-term recovery dependent on structural cost or pricing improvements.
Cash Flow ReversalA sharp reversal to deeply negative operating and free cash flow in 2025 elevates liquidity and refinancing risk. Negative cash generation forces external funding or asset sales, limits investment in product or process improvements, and can become self-reinforcing if not corrected.
Rising LeverageRapidly increasing debt-to-equity to ~0.93 reduces financial flexibility and raises interest exposure. Higher leverage restricts strategic choices, increases refinancing and covenant risk, and magnifies downside in a cyclical auto-parts industry if profitability and cash flow remain weak.