High LeverageA debt-to-equity ratio of 2.45 indicates significant reliance on debt financing. Persistently high leverage increases interest and refinancing risk, reducing financial flexibility and raising the chance that adverse sales or margin pressures materially impair liquidity over the medium term.
Low FCF Conversion Due To CapexHigh capital spending depresses free cash flow conversion despite operating profits. If capex remains elevated, the company’s ability to reduce leverage or build cash buffers is limited, leaving it exposed to funding strain if growth or operating cash flow weakens.
Recent Recovery From Prior Losses; Thin Net MarginWhile profitability has returned, prior multi‑year losses and a modest 3.8% net margin mean the improvement is recent and fragile. A thin margin provides limited downside protection against cyclical sales declines or higher costs, so sustained profitability must be monitored.