Persistent Unprofitable OperationsOngoing negative EBIT and net income are a structural headwind: they limit retained earnings, impede reinvestment from internal cash, and force reliance on external capital. Until operations generate sustainable profits, shareholder returns and long-term capital allocation remain constrained.
Rising Leverage ConcernsIncreasing leverage raises fixed obligations and reduces financial flexibility, making the company more vulnerable to demand shocks. With continued losses, higher debt servicing needs could crowd out investment and heighten refinancing risk, pressuring long-term stability unless deleveraging occurs.
Negative Return On EquityA negative ROE signals that the business is destroying shareholder value rather than creating it. Persistent negative ROE erodes equity, constrains future capital raising on favorable terms, and means investor returns depend on a material operational turnaround to restore profitability.