Kyndryl Holdings Incorporation (KD)
NYSE:KD
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Kyndryl Holdings Incorporation
(NYSE:KD)
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Rating:53Neutral
Price Target:
$13.00
▲(0.08% Upside)
Action:ReiteratedDate:02/10/26
The score is held back most by weak technicals (sharp downtrend and very weak momentum) and a mixed financial profile (improving profitability but pressured by leverage and inconsistent cash flow). Valuation is supportive with a low P/E, while the latest earnings call was balanced—strong signings/Consult/hyperscaler momentum offset by lowered FY26 guidance and SEC-related uncertainty.
Positive Factors
Higher-value services growth
Sustained 20% YoY growth in Kyndryl Consult and a 25% revenue share indicate a structural shift toward higher-margin advisory and modernization work. Moving mix from legacy management to consulting strengthens long-term margins, client stickiness, and opportunities for multi-year engagements and upsells.
Negative Factors
Elevated leverage
A debt-to-equity ratio near 3.25x signals high financial leverage for a services firm, reducing flexibility to absorb demand shocks or fund strategic investments. Elevated leverage increases refinancing and interest risks and constrains freedom to pursue transformative M&A or aggressive reinvestment.
Read all positive and negative factors
Positive Factors
Negative Factors
Higher-value services growth
Sustained 20% YoY growth in Kyndryl Consult and a 25% revenue share indicate a structural shift toward higher-margin advisory and modernization work. Moving mix from legacy management to consulting strengthens long-term margins, client stickiness, and opportunities for multi-year engagements and upsells.
Read all positive factors
Kyndryl Holdings Incorporation (KD) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.93B
Dividend YieldN/A
Average Volume (3M)3.51M
Price to Earnings (P/E)26.5
Beta (1Y)1.66
Revenue Growth-1.90%
EPS GrowthN/A
CountryUS
Employees80,000
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)0.52
Shares Outstanding225,447,190
10 Day Avg. Volume2,996,790
30 Day Avg. Volume3,508,799
Financial Highlights & Ratios
PEG Ratio-0.17
Price to Book (P/B)5.96
Price to Sales (P/S)0.48
P/FCF Ratio21.57
Enterprise Value/Market Cap2.42
Enterprise Value/Revenue0.47
Enterprise Value/Gross Profit2.15
Enterprise Value/Ebitda2.40
Forecast
1Y Price Target
$20.50Price Target Upside57.81% Upside
Rating ConsensusHold
Number of Analyst Covering6
EPS Forecast (FY)2.41
Revenue Forecast (FY)$15.08B
Kyndryl Holdings Incorporation Business Overview & Revenue Model
Company Description
Kyndryl Holdings, Inc. operates as a technology services company and IT infrastructure services provider worldwide. The company offers cloud services; core enterprise and cloud services; application, data, and artificial intelligence services; dig...
How the Company Makes Money
Kyndryl makes money primarily by selling IT infrastructure services to enterprise and government customers under service contracts that can include recurring managed services and project-based professional services. A major revenue stream is manag...
Kyndryl Holdings Incorporation Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyKyndryl Holdings Incorporation Earnings Call Summary
Earnings Call Date:Feb 09, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:May 13, 2026
Earnings Call Sentiment Neutral
The call presented a balanced picture: notable operational progress (strong Consult and hyperscaler growth, disciplined signings with healthy projected margins, automation and accounts remediation delivering sizable savings, positive cash generation and a solid balance sheet) was offset by meaningful near-term headwinds (elongated sales cycles, adverse IBM mix impact, localized market softness, higher-than-expected labor costs, a downward revision to fiscal 2026 profit and free cash flow guidance, and an SEC document request delaying the filing). While the company emphasized confidence in its multiyear fiscal 2028 targets, the combination of near-term revenue/margin timing issues and the SEC matter tempers the tone.Positive Updates
Revenue and Quarterly Result
Reported revenue of $3.9 billion for the quarter, up 3% year-over-year on a reported basis and unchanged in constant currency; company noted margin expansion, higher earnings, and positive free cash flow for the quarter.
Negative Updates
Slower Sales Cycles and Revised Outlook
Lengthening sales cycles (attributed to AI-driven complexity, data sovereignty concerns, and extended ERP-to-cloud timelines) led to weaker-than-expected sequential acceleration and a revised fiscal 2026 adjusted pretax income outlook of $575 million to $600 million and free cash flow guidance reduced to $325 million to $375 million (down from prior guidance near $550 million).
Read all updates
Q3-2026 Updates
Positive
Negative
Revenue and Quarterly Result
Reported revenue of $3.9 billion for the quarter, up 3% year-over-year on a reported basis and unchanged in constant currency; company noted margin expansion, higher earnings, and positive free cash flow for the quarter.
Read all positive updates
Company Guidance
Kyndryl said Q3 revenue was $3.9B (up 3% reported, flat in constant currency) with $3.9B of signings in the quarter (11 deals >$50M) and $15.4B of signings over the last 12 months, leaving a book-to-bill above 1.0 and a gross profit book-to-bill of 1.2 (average projected gross margin ~26%), while Kyndryl Consult grew 20% YoY in constant currency and represented 25% of revenue; Q3 adjusted EBITDA was $696M (down 1%) and adjusted pretax income was $168M (up 5%), free cash flow in the quarter was $217M (net CapEx $210M), cash was $1.35B, net leverage 0.7x, and hyperscaler-related revenue was $500M in Q3 (up 58% YoY) with management on track for nearly $2B of hyperscaler revenue by end of 2026; updated FY26 guidance is adjusted pretax income $575M–$600M, adjusted EBITDA margin ~17.5%, and free cash flow $325M–$375M (with roughly $160M cash taxes expected), while multiyear targets remain >$1.2B adjusted pretax income and >$1B adjusted free cash flow in fiscal 2028 (exit growth mid-single-digits); management also highlighted operational gains including ~$950M annualized savings from Kyndryl Bridge, $975M of cumulative annualized profit savings from focus accounts, and $100M of buybacks in the quarter (3.7M shares, ~1.6% of shares; ~$350M remaining authorization).Kyndryl Holdings Incorporation Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
46
Neutral
Cash Flow
55
Neutral
| Breakdown | TTM | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 15.12B | 15.06B | 16.05B | 17.03B | 18.66B | 18.66B |
| Gross Profit | 3.31B | 3.14B | 2.86B | 2.53B | 2.11B | 2.11B |
| EBITDA | 2.96B | 1.55B | 1.14B | 617.00M | -175.00M | -175.00M |
| Net Income | 249.00M | 252.00M | -340.00M | -1.37B | -2.30B | -2.30B |
Balance Sheet | ||||||
| Total Assets | 11.28B | 10.45B | 10.59B | 11.46B | 13.21B | 13.21B |
| Cash, Cash Equivalents and Short-Term Investments | 450.00M | 1.79B | 1.55B | 1.85B | 2.22B | 2.22B |
| Total Debt | 4.57B | 3.96B | 4.14B | 4.24B | 4.60B | 4.60B |
| Total Liabilities | 9.97B | 9.12B | 9.47B | 10.00B | 10.45B | 10.45B |
| Stockholders Equity | 1.19B | 1.22B | 1.01B | 1.36B | 2.77B | 2.77B |
Cash Flow | ||||||
| Free Cash Flow | -99.00M | 337.00M | -197.00M | -197.00M | -871.00M | -408.00M |
| Operating Cash Flow | 594.00M | 942.00M | 454.00M | 454.00M | -119.00M | 628.00M |
| Investing Cash Flow | -639.00M | -404.00M | -553.00M | -553.00M | -572.00M | -953.00M |
| Financing Cash Flow | -495.00M | -286.00M | -170.00M | -170.00M | 2.92B | 312.00M |
Kyndryl Holdings Incorporation Technical Analysis
Neutral
12.99
Price Trends
14.44
Negative
20.24
Negative
26.60
Negative
Market Momentum
-0.38
Negative
46.69
Neutral
59.60
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KD, the sentiment is Neutral. The current price of 12.99 is above the 20-day moving average (MA) of 12.66, below the 50-day MA of 14.44, and below the 200-day MA of 26.60, indicating a neutral trend. The MACD of -0.38 indicates Negative momentum. The RSI at 46.69 is Neutral, neither overbought nor oversold. The STOCH value of 59.60 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for KD.
Kyndryl Holdings Incorporation Risk Analysis
Kyndryl Holdings Incorporation disclosed 28 risk factors in its most recent earnings report. Kyndryl Holdings Incorporation reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Kyndryl Holdings Incorporation Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $12.78B | 23.70 | 13.16% | ― | 12.61% | 11.85% | |
73 Outperform | $6.27B | 14.72 | 21.81% | 1.41% | 7.40% | -14.45% | |
70 Outperform | $226.76B | 26.07 | 36.86% | 2.21% | 4.51% | 21.89% | |
68 Neutral | $7.04B | 30.32 | 10.27% | ― | 14.26% | -15.49% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
59 Neutral | $2.15B | 6.07 | 13.41% | ― | -4.13% | 2143.48% | |
53 Neutral | $2.93B | 26.53 | 20.43% | ― | -1.90% | ― |
* Technology Sector Average
KD
Kyndryl Holdings Incorporation
12.99
-18.16
-58.30%
CACI
Caci International
578.45
174.45
43.18%
EPAM
Epam Systems
129.99
-29.01
-18.25%
G
Genpact
36.93
-10.40
-21.98%
IBM
International Business Machines
241.74
12.14
5.29%
DXC
DXC Technology
12.69
-2.87
-18.44%
Kyndryl Holdings Incorporation Corporate Events
Executive/Board Changes
Kyndryl Announces Interim Finance and Legal Leadership Changes
Negative
Feb 9, 2026
On February 5, 2026, Kyndryl Holdings, Inc. named former Chief Operating Officer and current Global Head of Practices, Corporate Development and Administration, Harsh Chugh, as Interim Chief Financial Officer, and Senior Vice President for Finance...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.