Volatile, Weak Free Cash FlowRecurrent negative or near-zero free cash flow reduces the company’s ability to self-fund growth, pay dividends, or buy back shares. Over the medium term this creates dependence on external financing and raises vulnerability to working-capital swings or capex timing mismatches.
Margin CompressionMaterial decline in gross, operating and net margins suggests persistent cost or pricing pressures that erode profitability. If sustained, lower margins impair cash generation, limit reinvestment in R&D and product development, and weaken competitive positioning long-term.
Low Return On EquityA declining and very low ROE signals limited value creation on shareholder capital and may reflect weak pricing power or operational inefficiency. Over months, persistently low ROE can constrain investor support and restrict access to cost-effective capital for strategic initiatives.