Thin Gross MarginsStructurally low gross margins limit profit levers and make earnings sensitive to wage, fuel, and property cost increases. With little margin cushion, maintaining profitability requires continual operational efficiency gains and scale, constraining margin upside over months ahead.
Weak Earnings-to-cash ConversionModerate and volatile conversion from net income to free cash flow suggests earnings include accruals or working-capital timing benefits that may reverse. This undermines predictability of funds for dividends, capex, or debt reduction over the medium term.
Revenue & Margin VolatilityHistorical swings in revenue and margins indicate exposure to cyclical customer demand and contract timing. Such variability makes forecasting and capacity planning harder and raises execution risk for sustaining recent margin improvements over the next several quarters.