Uneven Cash Conversion HistoryHistoric swings in working capital and investments produced negative FCF in 2024 and TTM FCF only ~50% of net income, indicating unreliable cash conversion. Persistent volatility in cash generation can limit durable funding for growth, dividends, or capital deployment during weaker demand periods.
Margin Compression Vs Prior PeakNet margin below prior-peak levels signals margin pressure from mix shifts, cost increases, or pricing dynamics. Sustained margin compression would reduce free cash flow and returns, forcing tougher trade-offs between price, volume, and investment to restore prior profitability.
Modest Return On EquityAn ROE near 8.5% is adequate but not high; modest capital efficiency means shareholder value depends more on sustained growth than on improving operating leverage. If growth slows, the company may struggle to generate superior returns versus peers or justify incremental capital deployment.