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Kyndryl Holdings Incorporation
(NYSE:KD)
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Rating:56Neutral
Price Target:
$14.00
▲(16.18% Upside)
Action:Reiterated
Date:08/01/26
KD’s score is driven primarily by improving financial trajectory—especially much stronger operating/free cash flow and a return to modest profitability—balanced against persistent multi-year revenue contraction and leverage/visibility concerns in the financial statements. The earnings call adds support through clearer profit/FCF guidance and reiterated FY28 targets, but near-term revenue pressure, one-time workforce charges, and control-remediation risk cap the upside. Technically, the stock shows better short-term momentum (above 20/50/100-day averages) but remains below the 200-day average, and valuation is neutral around a 15.6x P/E with no dividend data.
Positive Factors
Improved free cash flow
Kyndryl's step-change to sustained positive free cash flow and materially stronger operating cash flow provides durable financial flexibility. This supports reinvestment in higher-margin services, debt reduction, buybacks and cushions against cyclical demand, improving long-term solvency for a low-margin services model.
Negative Factors
Multi-year revenue decline
Persistent top-line contraction erodes scale economics and pricing leverage for an infrastructure services provider. Shrinking revenue increases fixed-cost absorption pressure, makes margin targets harder to sustain, and raises execution risk for management's multi-year profitability ambitions.
Read all positive and negative factors
Positive Factors
Negative Factors
Improved free cash flow
Kyndryl's step-change to sustained positive free cash flow and materially stronger operating cash flow provides durable financial flexibility. This supports reinvestment in higher-margin services, debt reduction, buybacks and cushions against cyclical demand, improving long-term solvency for a low-margin services model.
Read all positive factors
Kyndryl Holdings Incorporation Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down Kyndryl’s sales across regions to highlight market concentration and where growth is coming from. Tracking regional trends helps investors spot expanding markets for infrastructure services and identify areas vulnerable to regulatory changes or economic headwinds.
Breaks down Kyndryl’s sales across regions to highlight market concentration and where growth is coming from. Tracking regional trends helps investors spot expanding markets for infrastructure services and identify areas vulnerable to regulatory changes or economic headwinds.
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The Fly
The FlyKyndryl Holdings Incorporation (KD) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.99B
Dividend YieldN/A
Average Volume (3M)4.16M
Price to Earnings (P/E)15.8
Beta (1Y)1.57
Revenue Growth0.23%
EPS Growth-20.13%
CountryUS
Employees72,000
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)0.86
Shares Outstanding220,517,210
10 Day Avg. Volume3,869,924
30 Day Avg. Volume4,158,991
Financial Highlights & Ratios
PEG Ratio-0.75
Price to Book (P/B)2.55
Price to Sales (P/S)0.20
P/FCF Ratio8.81
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$14.00Price Target Upside16.18% Upside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)1.79
Revenue Forecast (FY)$14.90B
Kyndryl Holdings Incorporation Business Overview & Revenue Model
Company Description
Kyndryl Holdings, Inc. (KD) is a global provider of IT infrastructure services and solutions. The company designs, builds, manages, and modernizes enterprise technology environments, with a focus on mission-critical systems such as hybrid cloud in...
How the Company Makes Money
Kyndryl makes money primarily by selling IT services related to running and modernizing customers’ technology infrastructure. Its core revenue model is services-based and typically includes: (1) Managed services/outsourcing, where Kyndryl operates...
Kyndryl Holdings Incorporation Earnings Call Summary
Earnings Call Date:May 06, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Aug 05, 2026
Earnings Call Sentiment Positive
The call presents a constructive underlying progress story: strong upside in high-value areas (Kyndryl Consult, hyperscaler/alliance revenue, AI-driven productivity and margin expansion) and solid balance-sheet metrics, but offset by near-term top-line pressure from elongated sales cycles and an evolving IBM relationship that has depressed revenue growth. Management provided clear near-term guidance that includes one-time charges for workforce rebalancing and reiterated multiyear targets (FY28 adjusted PTI >$1.2B and >$1B free cash flow) driven by higher-margin signings and efficiency gains.Positive Updates
Revenue and Scale in Hyperscaler/Alliances
Hyperscaler-related revenue reached nearly $2.0B ($1.9B disclosed) in FY26, up 59% year-over-year and exceeding the company’s 50% growth expectation, reflecting significant multi-year growth from essentially zero four years ago.
Negative Updates
Flat Revenue and Year-over-Year Constant Currency Decline
FY26 revenue totaled $15.1B, flat on a reported basis and down 3% in constant currency, reflecting extended sales cycles and mixed customer procurement behaviors.
Read all updates
Q4-2026 Updates
Positive
Negative
Revenue and Scale in Hyperscaler/Alliances
Hyperscaler-related revenue reached nearly $2.0B ($1.9B disclosed) in FY26, up 59% year-over-year and exceeding the company’s 50% growth expectation, reflecting significant multi-year growth from essentially zero four years ago.
Read all positive updates
Company Guidance
Kyndryl's guidance for fiscal 2027 calls for adjusted pretax income of $600–$700 million (which includes roughly $200 million of primarily Q1 workforce‑rebalancing charges that management expects will be largely offset by second‑half savings), with those actions expected to yield $400–$500 million of annualized run‑rate savings in fiscal 2028; revenue is expected to be flat to down 2% in constant currency (Kyndryl Consult and alliances/hyperscaler streams are forecast to grow while a similar IBM‑related headwind is assumed), Q1 is expected to be the low point in earnings with stronger second‑half revenue, and adjusted pretax income less cash taxes (cash taxes ~ $200 million) is expected to convert to free cash flow of about $400–$500 million in FY27. For context, management noted FY26 results of $15.1 billion revenue, $13.5 billion of signings, $581 million adjusted pretax income, $2.7 billion adjusted EBITDA, ~$406 million free cash flow, nearly $2 billion hyperscaler revenue, a $2.6 billion cash balance, and 0.5x net leverage, and reiterated FY28 targets of >$1.2 billion adjusted pretax income and >$1 billion free cash flow on low single‑digit revenue growth.Kyndryl Holdings Incorporation Financial Statement Overview
Summary
Income Statement
44
Neutral
Balance Sheet
38
Negative
Cash Flow
63
Positive
| Breakdown | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 15.09B | 15.06B | 16.05B | 17.03B | 18.66B |
| Gross Profit | 3.29B | 3.14B | 2.86B | 2.53B | 2.11B |
| EBITDA | 3.28B | 1.55B | 1.14B | 617.00M | -175.00M |
| Net Income | 198.00M | 252.00M | -340.00M | -1.37B | -2.30B |
Balance Sheet | |||||
| Total Assets | 12.55B | 10.45B | 10.59B | 11.46B | 13.21B |
| Cash, Cash Equivalents and Short-Term Investments | 2.62B | 1.79B | 1.55B | 1.85B | 2.22B |
| Total Debt | 4.96B | 3.96B | 4.14B | 4.24B | 4.60B |
| Total Liabilities | 11.26B | 9.12B | 9.47B | 10.00B | 10.45B |
| Stockholders Equity | 1.18B | 1.22B | 1.01B | 1.36B | 2.77B |
Cash Flow | |||||
| Free Cash Flow | 340.00M | 337.00M | -197.00M | -197.00M | -871.00M |
| Operating Cash Flow | 948.00M | 942.00M | 454.00M | 454.00M | -119.00M |
| Investing Cash Flow | -561.00M | -404.00M | -553.00M | -553.00M | -572.00M |
| Financing Cash Flow | 457.00M | -286.00M | -170.00M | -170.00M | 2.92B |
Kyndryl Holdings Incorporation Technical Analysis
Positive
12.05
Price Trends
11.97
Positive
12.45
Positive
17.93
Negative
Market Momentum
0.04
Negative
52.41
Neutral
56.76
Neutral
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 12.05 is below the 20-day moving average (MA) of 12.37, above the 50-day MA of 11.97, and below the 200-day MA of 17.93, indicating a neutral trend. The MACD of 0.04 indicates Negative momentum. The RSI at 52.41 is Neutral, neither overbought nor oversold. The STOCH value of 56.76 is Neutral, 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 29 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 |
|---|---|---|---|---|---|---|---|
71 Outperform | $5.96B | 10.66 | 22.44% | 2.29% | 6.47% | 10.82% | |
69 Neutral | $5.51B | 15.08 | 10.67% | ― | 14.21% | -2.92% | |
65 Neutral | $11.00B | 20.42 | 13.15% | ― | 9.58% | 14.11% | |
65 Neutral | $210.71B | 19.53 | 33.52% | 3.14% | 7.90% | 82.11% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
56 Neutral | $2.99B | 15.84 | 16.40% | ― | 0.23% | -20.13% | |
54 Neutral | $1.82B | 14.79 | 3.97% | ― | -2.42% | -65.01% |
* Technology Sector Average
KD
Kyndryl Holdings Incorporation
13.55
-23.15
-63.08%
CACI
Caci International
497.75
31.07
6.66%
EPAM
Epam Systems
105.56
-47.74
-31.14%
G
Genpact
35.17
-6.61
-15.81%
IBM
International Business Machines
223.65
-22.04
-8.97%
DXC
DXC Technology
11.24
-2.10
-15.74%
Kyndryl Holdings Incorporation Corporate Events
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
Kyndryl Shareholders Approve Governance and Compensation Measures
Positive
Jul 31, 2026
On July 30, 2026, Kyndryl Holdings, Inc. stockholders approved several key governance and compensation measures at the company’s annual meeting. Investors backed the election of six directors with roughly 90% support, endorsed on an advisory...
Business Operations and StrategyExecutive/Board Changes
Kyndryl appoints new CFO and General Counsel leadership
Positive
Jul 6, 2026
On July 1, 2026, Kyndryl’s board appointed Ellen Johnson as Chief Financial Officer, with her employment beginning on July 20 and her assumption of the CFO role scheduled for early August 2026 following the filing of first-quarter fiscal 202...
Business Operations and StrategyStock BuybackFinancial Disclosures
Kyndryl Announces Workforce Rebalancing to Streamline Operations
Neutral
May 6, 2026
On May 5, 2026, Kyndryl approved workforce rebalancing actions aimed at streamlining operations, expecting about $200 million in severance-related charges largely in the first quarter of fiscal 2027 and targeting annualized run-rate operating expe...
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.