Negative Free Cash FlowPersistent negative free cash flow from significant capital expenditures means reliance on external financing or equity to fund growth. Over months this can constrain liquidity, increase financing costs, and limit ability to self-fund projects or return capital unless cash conversion improves.
Low Net Profit MarginDespite healthy gross and EBIT margins, low net margins suggest material downstream costs (interest, depreciation, taxes) compress final profitability. This reduces retained earnings, limits resilience to adverse shocks, and restricts long-term capacity to accumulate capital internally.
Moderate Leverage And Modest ROEModerate debt increases fixed charge burden and can amplify earnings volatility, while modest ROE implies returns may not fully compensate for capital risk. Over a multi-month horizon this may limit attractiveness to investors and constrain ability to raise cheaper growth capital.