Kyndryl Holdings Incorporation (KD) AI Stock Analysis

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Kyndryl Holdings Incorporation

(NYSE:KD)

Select Model

Neutral 64 (OpenAI - 4o)

Rating:64Neutral

Price Target:

$28.00

▲(2.71% Upside)

Kyndryl Holdings' overall stock score reflects a mix of financial recovery and strategic growth initiatives, tempered by technical weaknesses and revenue challenges. The company's strong earnings call and reasonable valuation are positive, but the declining revenue and high leverage remain significant risks.

Positive Factors

Margin Expansion

Margin expansion indicates improved operational efficiency and cost management, enhancing profitability and providing a buffer against market volatility.

Strategic Acquisition

The acquisition expands Kyndryl's capabilities in the sovereign cloud market, strengthening its competitive position and service offerings in Europe.

Growth in Kyndryl Consult

Strong growth in Kyndryl Consult demonstrates successful expansion in consulting services, driving revenue and enhancing client relationships.

Negative Factors

High Leverage

High leverage can limit financial flexibility and increase risk, potentially impacting the company's ability to invest in growth opportunities.

Declining Free Cash Flow

Declining free cash flow raises concerns about cash generation, which is crucial for funding operations, investments, and debt obligations.

Revenue Below Expectations

Revenue shortfalls can signal challenges in sales execution or market demand, potentially affecting future growth and profitability.

Kyndryl Holdings Incorporation (KD) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$6.23B

Dividend YieldN/A

Average Volume (3M)1.70M

Price to Earnings (P/E)16.1

Beta (1Y)1.53

Revenue Growth-1.90%

EPS GrowthN/A

CountryUS

Employees80,000

SectorTechnology

Sector Strength88

IndustryInformation Technology Services

Share Statistics

EPS (TTM)0.38

Shares Outstanding228,564,350

10 Day Avg. Volume1,642,255

30 Day Avg. Volume1,696,644

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 Cap1.48

Enterprise Value/Revenue0.61

Enterprise Value/Gross Profit2.92

Enterprise Value/Ebitda4.97

Forecast

1Y Price Target

$33.25

Price Target Upside21.97% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering4

EPS Forecast (FY)N/A

Revenue Forecast (FY)N/A

Kyndryl Holdings Incorporation Business Overview & Revenue Model

Company DescriptionKyndryl 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; digital workplace services; security and resiliency services; and network services and edge services. It serves financial, telecommunications, retail, automobile, and transportation industries. The company was incorporated in 2020 and is headquartered in New York, New York.

How the Company Makes MoneyKyndryl generates revenue primarily through long-term service contracts with clients, providing a range of IT infrastructure services such as cloud management, data center operations, network management, and cybersecurity solutions. The company's revenue model is based on both project-based fees and recurring charges for managed services, which create a stable income stream. Key revenue streams include consulting services for digital transformation initiatives, ongoing maintenance contracts for IT systems, and partnerships with major technology providers that enhance its service offerings. Additionally, Kyndryl leverages its extensive industry expertise to deliver tailored solutions, fostering long-term relationships that contribute to sustained earnings.

Kyndryl Holdings Incorporation Key Performance Indicators (KPIs)

Any

Revenue by Geography

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.

Chart InsightsKyndryl's revenue across all geographic segments shows a declining trend, particularly in the United States and Principal Markets, reflecting broader challenges. Despite this, the earnings call highlights robust growth in consulting and hyperscaler-related revenues, suggesting strategic pivots are gaining traction. The company's focus on alliances and advanced delivery is expected to drive modest revenue growth in fiscal 2026, despite current declines. The increase in customer signings and strong cash flow projections indicate potential for recovery, although focus account issues remain a concern.

Data provided by:

The Fly

Kyndryl Holdings Incorporation Earnings Call Summary

Earnings Call Date:Nov 04, 2025

(Q2-2026)

% Change Since: |

Next Earnings Date:Feb 10, 2026

Earnings Call Sentiment Positive

Kyndryl's earnings call highlighted significant margin expansion and earnings growth, strong performance in Kyndryl Consult and Hyperscaler-related revenues, and an increase in the share repurchase program, indicating confidence in future objectives. However, revenue fell short of expectations due to longer sales cycles and a strategic focus on higher-margin content. Despite these challenges, the company is optimistic about the second half due to a strong pipeline and strategic acquisitions.

Q2-2026 Updates

Positive Updates

Margin Expansion and Earnings Growth

Kyndryl delivered margin expansion with adjusted EBITDA increasing by 15% year-over-year and adjusted pretax income growing by 171%, reflecting strong earnings growth.

Growth in Kyndryl Consult and Hyperscaler-Related Revenue

Kyndryl Consult revenue increased by 32% in constant currency over the last 12 months, and Hyperscaler-related revenues doubled, surpassing the initial fiscal 2026 target of $1.8 billion.

Increase in Share Repurchase Program

Kyndryl increased its share repurchase program by $400 million, demonstrating confidence in achieving fiscal 2028 objectives.

Strong Pipeline for Second Half

Entered the third quarter with a record pipeline, supporting second half signings growth and a full-year book-to-bill ratio above 1.

Strategic Acquisition

Kyndryl announced the acquisition of a midsized cloud services provider in Europe, expanding its capabilities in the sovereign cloud market.

Negative Updates

Revenue Below Expectations

Revenue for the quarter came in about $100 million below target due to longer sales cycles for expanded scope deals and a focus on margin expansion.

Constant Currency Revenue Decline

Revenue decreased by 3.7% in constant currency, affected by a 4-point drag on revenue growth due to the removal of low-margin hardware and software content.

Company Guidance

During the Kyndryl Second Quarter 2026 Earnings Conference Call, the company provided several key metrics and insights into their performance and future outlook. The CEO, Martin Schroeter, highlighted margin expansion, a significant increase in earnings, and strong growth in Kyndryl Consult and Hyperscaler-related revenue streams. The company reported a trailing 12-month revenue book-to-bill ratio above 1, indicating robust future revenue growth. The revenue for the quarter was approximately $100 million below target due to longer sales cycles linked to expanded scope deals, which are expected to close before the fiscal year-end. Despite a 4-point drag on revenue growth from removing low-margin content, constant currency revenue growth would have been positive. The company reaffirmed its fiscal year 2026 outlook and increased its share repurchase program by $400 million, reflecting confidence in achieving fiscal 2028 objectives. Kyndryl is on track to deliver over $1 billion in adjusted free cash flow and over $1.2 billion in adjusted pretax income by fiscal 2028. The company reported strong growth in Kyndryl Consult, with a 32% increase in constant currency over the last 12 months and Hyperscaler-related revenues surpassing initial targets. The advanced delivery initiative is generating $875 million in annual savings, and Kyndryl Bridge, their AI-powered operating platform, is performing over 186 million automations monthly. The company's strategic progress is supported by a gross profit book-to-bill ratio above 1, and they maintain a positive outlook for the second half of fiscal 2026, expecting revenue growth of 4% to 5%.

Kyndryl Holdings Incorporation Financial Statement Overview

Summary

Kyndryl Holdings shows signs of financial recovery with improved profitability and cash flow metrics. However, the declining revenue trend and high leverage are significant risks. The company needs to focus on stabilizing revenue and managing debt to ensure long-term financial health.

Income Statement

Kyndryl Holdings has shown improvement in profitability with a TTM net profit margin of 2.71% compared to previous losses. The gross profit margin has also improved to 21.22% TTM. However, revenue has been declining, with a significant drop of 35.2% TTM. The EBIT and EBITDA margins have improved, indicating better operational efficiency, but the revenue decline poses a risk to future growth.

Balance Sheet

The company has a high debt-to-equity ratio of 3.28 TTM, indicating significant leverage, which could pose financial risks. Return on equity has improved to 25.67% TTM, showing better profitability. However, the equity ratio is low, suggesting limited asset backing by equity, which could be a concern in terms of financial stability.

Cash Flow

Kyndryl Holdings has shown strong free cash flow growth of 114.17% TTM, indicating improved cash generation. The operating cash flow to net income ratio is 0.21, showing reasonable cash conversion. The free cash flow to net income ratio of 0.60 suggests good cash profitability, but the past volatility in cash flows remains a concern.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	15.01B	15.06B	16.05B	17.03B	18.66B	18.66B
Gross Profit	3.15B	3.14B	2.86B	2.53B	2.11B	2.11B
EBITDA	1.85B	1.55B	1.14B	617.00M	-175.00M	-175.00M
Net Income	567.00M	252.00M	-340.00M	-1.37B	-2.30B	-2.30B
Balance Sheet
Total Assets	10.45B	10.45B	10.45B	10.59B	11.46B	13.21B
Cash, Cash Equivalents and Short-Term Investments	1.79B	1.79B	1.79B	1.55B	1.85B	2.22B
Total Debt	3.96B	3.96B	3.96B	4.14B	4.24B	4.60B
Total Liabilities	9.12B	9.12B	9.12B	9.47B	10.00B	10.45B
Stockholders Equity	1.22B	1.22B	1.22B	1.01B	1.36B	2.77B
Cash Flow
Free Cash Flow	-45.00M	337.00M	-197.00M	-197.00M	-871.00M	-408.00M
Operating Cash Flow	603.00M	942.00M	454.00M	454.00M	-119.00M	628.00M
Investing Cash Flow	-541.00M	-404.00M	-553.00M	-553.00M	-572.00M	-953.00M
Financing Cash Flow	-400.00M	-286.00M	-170.00M	-170.00M	2.92B	312.00M

Kyndryl Holdings Incorporation Technical Analysis

Technical Analysis Sentiment

Positive

Last Price27.26

Price Trends

50DMA

26.40

Positive

100DMA

28.42

Negative

200DMA

32.36

Negative

Market Momentum

MACD

0.09

Negative

RSI

56.45

Neutral

STOCH

82.50

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KD, the sentiment is Positive. The current price of 27.26 is above the 20-day moving average (MA) of 26.87, above the 50-day MA of 26.40, and below the 200-day MA of 32.36, indicating a neutral trend. The MACD of 0.09 indicates Negative momentum. The RSI at 56.45 is Neutral, neither overbought nor oversold. The STOCH value of 82.50 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IBM	79 Outperform	$282.96B	36.39	30.25%	2.21%	4.51%	21.89%
G	78 Outperform	$8.21B	15.55	22.32%	1.41%	7.40%	-14.45%
CACI	74 Outperform	$13.22B	25.79	13.14%	―	12.61%	11.85%
EPAM	70 Neutral	$12.14B	33.54	10.21%	―	14.26%	-15.49%
KD	64 Neutral	$6.23B	16.06	35.51%	―	-1.90%	―
DXC	62 Neutral	$2.62B	7.44	12.33%	―	-4.13%	2143.48%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

* Technology Sector Average

Performance Comparison

Kyndryl Holdings Incorporation

27.26

-9.47

-25.78%

CACI

Caci International

584.09

138.03

30.94%

EPAM

Epam Systems

219.78

-6.04

-2.67%

Genpact

47.62

3.97

9.10%

IBM

International Business Machines

302.72

90.80

42.85%

DXC

DXC Technology

15.06

-4.70

-23.79%

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.Date of analysis: Nov 19, 2025