Revenue Growth WeaknessNegative recent revenue growth is a structural concern: shrinking top line limits scalability, reduces operating leverage and constrains reinvestment. If sustained for multiple quarters, it undermines ability to maintain margins and to service rising leverage without strategic corrective actions.
Rising Leverage RiskModerate debt‑to‑equity with rising debt levels reduces financial flexibility and raises interest exposure. In a business facing revenue pressures, higher leverage increases refinancing and covenant risk, limiting capacity for strategic investments or shareholder returns over the medium term.
Margin ErosionObserved declines in gross and net margins point to margin pressure from higher costs or pricing challenges. Continued erosion would weaken cash flow conversion and reduce funds available for R&D and marketing, making it harder to defend market position and sustain long‑term growth.