Rising Financial LeverageMarked increase in debt-to-equity raises structural risk: higher interest burden and reduced financial flexibility. Over 2-6 months, elevated leverage limits ability to invest, raises refinancing risk in tighter credit markets, and amplifies downside in earnings volatility.
Negative Operating And Free Cash FlowPersistent negative operating and free cash flow indicates the business is not converting revenue into sustainable cash. This constrains capital spending, makes debt servicing harder, and forces reliance on external financing, undermining long-term growth plans.
Low Net Profit MarginLow net margins despite revenue and gross margin gains suggest rising operating expenses or financial costs are eroding profitability. Structurally weak net margins reduce retained earnings, limit reinvestment capacity, and heighten sensitivity to cost or demand shocks.