Volatile And Negative Free Cash FlowA large negative FCF in FY2025 signals inconsistent cash conversion and suggests elevated capex, working capital needs, or weaker operational cash generation. Even with no debt, negative FCF reduces financial flexibility, constrains reinvestment or dividends, and raises forecasting risk across the coming months.
Modest Net MarginsA net margin under 5% means limited earnings cushion to absorb cost pressures or demand volatility. Modest margins make it harder to convert high gross margin into retained profits once SG&A and operating costs rise, restricting long-term earnings growth unless operating leverage or pricing improves.
Moderate ROE And Downturn SensitivityModerate ROE implies the company generates limited returns on equity capital, and prior deep losses show earnings are vulnerable in downturns. This sensitivity limits shareholder return potential and highlights operational volatility despite low leverage, a structural weakness during economic stress.