Let's delve into the factors that might continue to take a toll on the firm. Weak Demand Environment : In the quarters ahead, Tetra Tech anticipates to experience an adverse impact on its businesses associated with the U.S. commercial and international clients. Notably, the businesses are likely to be hurt on account of a weaker outlook for oil and gas capital expenditure, and the weakened demand environment, owing to the coronavirus-led market downturn. Escalating Cost Issues : Tetra Tech has been experiencing rising costs over the past few quarters. For instance, its subcontractor costs and other cost of revenues (combined) increased 1.8% in the second quarter of fiscal 2020 (ended Mar 29, 2020) on a year-over-year basis. In addition, in the quarter, the company's selling, general and administrative expenses expanded 4.3% year over year. We believe that unwarranted rise in costs and expenses might continue to prove detrimental to its financials in the quarters ahead.