Zero Free Cash FlowThe loss of free cash flow is a structural concern: it limits the company's ability to self-fund capex, pay down debt, or return capital. Persistent weak cash conversion can force reliance on external financing, increasing cost of capital and constraining strategic flexibility over the medium term.
Thin Net ProfitabilityA net margin near zero offers minimal buffer against cyclical downturns or cost shocks. Persistently thin net profitability undermines retained earnings growth, limits reinvestment capacity, and makes funding growth or absorbing margin volatility harder without operational improvements or higher-margin contracts.
Earnings VolatilityMarked swings in margins and income reflect operational and market execution risk. Such volatility complicates forecasting, capital allocation, and stakeholder confidence. Over the medium term, inconsistent profitability raises the risk that revenue gains will not sustainably translate into free cash flow or shareholder returns.