Persistent Net LossesLarge, persistent net losses indicate the business is not yet generating sustainable profit and are eroding retained capital. Over months this forces repeated external funding or equity dilution, limits reinvestment capacity, and raises execution risk until a durable profit improvement is achieved.
Consistent Negative Operating Cash FlowMaterially negative operating cash flow across periods shows the company consumes cash to run operations. This structural cash burn creates reliance on financing, constrains strategic flexibility, and increases the risk that commercial gains are undermined by liquidity shortfalls before break‑even.
Volatile And Negative Gross MarginsVolatile or negative gross margins point to pricing, production or product‑mix issues that undermine operating leverage. Without stable positive gross margins, revenue growth alone cannot translate into sustainable profits, making durable margin recovery essential for long‑term viability.