Declining Free Cash Flow ConversionWeaker conversion of earnings into free cash flow reduces internal funding for capex, dividends, or buybacks. Persistent lower operating cash or rising capital spending can pressure liquidity, limit strategic investments, and increase reliance on cash reserves despite a strong balance sheet.
Pressure On Returns And Net IncomeA falling ROE and declining net income signal deteriorating profitability efficiency. If not reversed, lower returns can constrain shareholder value creation and may reflect competitive pressures, pricing erosion, or inefficiencies that impair long-term capital allocation and investor confidence.
Reliance On Cyclical Hardware PlacementsWhile consumables provide steady revenue, growth still depends on periodic hardware sales. This exposes top-line variability to customers' capital expenditure cycles and macro spending, making sustained revenue acceleration contingent on new equipment demand beyond installed-base consumption.