Relatively High Leverage On Balance SheetElevated debt-to-equity reduces financial flexibility and raises interest expense sensitivity, limiting room for aggressive capex or strategic M&A. In an industry subject to cyclical downturns, leverage increases refinancing and liquidity risk over the medium term.
Inconsistent Net Income And Profitability VolatilityVolatile net income signals earnings quality issues from items like non-recurring charges, pricing pressure, or cost swings. Such inconsistency complicates forecasting and reduces confidence in sustained EPS growth, increasing risk for stakeholders over coming quarters.
Exposure To OEM Demand Cycles & Contract PricingHeavy dependence on OEM production volumes and per-part contract pricing makes revenues sensitive to auto cycle swings and model mix shifts. This structural exposure can compress margins and revenue during downturns or program delays, limiting stability.