Kyndryl Holdings Incorporation (KD) AI Stock Analysis

• Market Cap: $8.87B
• Dividend Yield: N/A
• Average Volume (3M): 1.79M
• Price to Earnings (P/E): 37.8
• Beta (1Y): 1.53
• Revenue Growth: -8.20%
• EPS Growth: N/A
• Country: US
• Employees: 80,000
• Sector: Technology
• Sector Strength: 90
• Industry: Information Technology Services
• EPS (TTM): 0.52
• Shares Outstanding: 231,422,040
• 10 Day Avg. Volume: 1,607,279
• 30 Day Avg. Volume: 1,791,606
• PEG Ratio: 0.43
• Price to Book (P/B): 7.59
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 15.83
• Enterprise Value/Market Cap: 0.92
• Enterprise Value/Revenue: 0.13
• Enterprise Value/Gross Profit: 3.51
• Enterprise Value/Ebitda: 1.51
• 1Y Price Target: $46.75
• Price Target Upside: 19.50% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 52 Neutral
• Price Target: ―

Kyndryl Holdings faces significant financial challenges, reflected in its low financial performance score, with declining revenue and high leverage posing financial risks. Technical analysis shows mixed signals, indicating potential for both upward and downward movements. The high P/E ratio suggests overvaluation, especially in light of financial struggles. However, the recent earnings call provided a positive outlook, highlighting strong growth in key areas, which slightly balances the overall score. Strategic improvements are necessary to enhance financial stability and growth prospects.

Positive Factors

Bookings and Contract Wins

Bookings trends continued to be a bright spot in the quarter.

Financial Performance

Free cash flow of $335M exceeded BofAe/implied guide of $245M/$240M.

Negative Factors

Audit Concerns

The report alleges aggressive accounting, coinciding with potential incremental IBM-related costs, suspect signings metrics, audit concerns, and internal stock sales.

Internal Controls

The report also alleges weakness in internal controls and key audit matters.

Kyndryl Holdings Incorporation Business Overview & Revenue Model

Company Description

Kyndryl Holdings Incorporation, established in 2021 as a spin-off from IBM, operates within the information technology services sector. The company is a global leader in providing infrastructure services, hosting services, network services, and digital workplace services. Kyndryl focuses on helping businesses and organizations worldwide manage and modernize their IT systems, optimize their digital transformation processes, and ensure operational resilience through a comprehensive suite of managed services and technology solutions.

How the Company Makes Money

Kyndryl makes money primarily through its range of IT infrastructure services, which it provides to a diverse clientele across various industries. The company's revenue model is based on long-term service contracts with enterprises that require ongoing IT management, cloud services, and digital transformation support. Key revenue streams include fees for managed services, cloud infrastructure management, and digital workplace solutions. Kyndryl's earnings are significantly enhanced by strategic partnerships with major technology providers like Microsoft, Google, and Amazon, which enable it to offer integrated cloud and IT solutions. Additionally, the company benefits from its legacy customer base inherited from IBM, which includes numerous Fortune 500 companies, ensuring a stable and recurring revenue flow.

Kyndryl Holdings Incorporation Financial Statement Overview

Summary

Kyndryl Holdings is facing a challenging financial position with declining revenue and profitability issues. The income statement shows a trend of decreasing revenue with some recovery in margins. The balance sheet highlights high leverage and limited equity, posing financial risks. Cash flow statements indicate difficulties in generating positive cash flow. Overall, the financials suggest the need for strategic improvements to enhance stability and growth.

Income Statement

Kyndryl Holdings has been experiencing declining revenue over recent years. The TTM (Trailing-Twelve-Months) shows a slight recovery in margins, with a gross profit margin of approximately 39.8% and a net profit margin of 0.9%. However, the company has struggled with consistent profitability, evidenced by previous years' losses. The EBIT and EBITDA margins have shown some improvement, but overall revenue growth has been negative.

Balance Sheet

The balance sheet indicates a high debt-to-equity ratio in the TTM (Trailing-Twelve-Months) of approximately 3.61, reflecting significant leverage. The return on equity is modest at 12.6%, suggesting limited profitability on shareholders' equity. The equity ratio is low, highlighting potential financial instability. Overall, the balance sheet reflects a high-risk financial structure with limited equity support.

Cash Flow

Cash flow analysis reveals challenges with free cash flow, which has been negative and inconsistent. The operating cash flow to net income ratio is approximately 3.67 in the TTM (Trailing-Twelve-Months), indicating reliance on operational cash rather than profitability. The free cash flow to net income ratio is negative, underscoring ongoing struggles to generate cash from operations.

Breakdown	Mar 2025	Mar 2024	Mar 2023	Dec 2021	Dec 2020
Income Statement
Total Revenue	15.06B	16.05B	17.03B	18.66B	19.35B
Gross Profit	0.00	2.86B	2.53B	2.09B	2.11B
EBITDA	0.00	1.14B	617.00M	-175.00M	-175.00M
Net Income	252.00M	-340.00M	-1.37B	-2.32B	-2.01B
Balance Sheet
Total Assets	10.45B	10.59B	11.46B	13.21B	11.21B
Cash, Cash Equivalents and Short-Term Investments	0.00	1.55B	1.85B	2.22B	24.00M
Total Debt	274.00M	4.14B	4.24B	4.60B	1.39B
Total Liabilities	9.12B	9.47B	10.00B	10.45B	6.28B
Stockholders Equity	1.22B	1.01B	1.36B	2.77B	4.87B
Cash Flow
Free Cash Flow	942.00M	-197.00M	-84.00M	-871.00M	-408.00M
Operating Cash Flow	942.00M	454.00M	781.00M	-119.00M	628.00M
Investing Cash Flow	0.00	-553.00M	-835.00M	-572.00M	-953.00M
Financing Cash Flow	-286.00M	-170.00M	-141.00M	2.92B	312.00M

Kyndryl Holdings Incorporation Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 39.12
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 39.12 is below the 20-day moving average (MA) of 40.61, below the 50-day MA of 40.22, and above the 200-day MA of 34.95, indicating a neutral trend. The MACD of -0.40 indicates Positive momentum. The RSI at 44.58 is Neutral, neither overbought nor oversold. The STOCH value of 45.99 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for KD.

Kyndryl Holdings Incorporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WNS	78 Outperform	$3.21B	19.92	21.24%	―	1.94%	26.19%
G	77 Outperform	$7.88B	15.34	22.21%	1.42%	7.31%	-15.86%
CACI	76 Outperform	$10.51B	22.64	13.48%	―	14.16%	22.25%
SAIC	72 Outperform	$5.38B	16.08	21.63%	1.29%	3.39%	-16.78%
DXC	67 Neutral	$2.65B	6.79	12.88%	―	-5.82%	469.88%
Sector *	63 Neutral	$34.70B	5.15	-11.38%	1.67%	5.54%	-17.15%
KD	52 Neutral	$8.87B	37.78	22.47%	―	-8.20%	―

Kyndryl Holdings Incorporation Corporate Events

Kyndryl Holdings Announces $300 Million Share Buyback

Kyndryl Holdings, Inc. has announced a $300 million share repurchase program, signaling confidence in their business growth and financial stability. The company plans to buy back shares through various market transactions, with the flexibility to modify or discontinue the program as needed. This move aligns with Kyndryl’s strategy to return capital to shareholders while maintaining financial agility.