Kyndryl Holdings Incorporation (KD) AI Stock Analysis

• Market Cap: $7.21B
• Dividend Yield: N/A
• Average Volume (3M): 3.20M
• Price to Earnings (P/E): 26.2
• Beta (1Y): 1.50
• Revenue Growth: -3.44%
• EPS Growth: N/A
• Country: US
• Employees: 80,000
• Sector: Technology
• Sector Strength: 84
• Industry: Information Technology Services
• EPS (TTM): 0.37
• Shares Outstanding: 231,143,970
• 10 Day Avg. Volume: 2,200,795
• 30 Day Avg. Volume: 3,197,618
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.76
• Enterprise Value/Revenue: 0.84
• Enterprise Value/Gross Profit: 4.06
• Enterprise Value/Ebitda: 10.12
• 1Y Price Target: $42.50
• Price Target Upside: 33.77% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 48 Neutral
• Price Target: $30.00 ▼(-5.57% Downside)

Kyndryl Holdings' overall stock score is primarily influenced by its financial challenges, including high leverage and cash flow difficulties. The technical analysis indicates bearish momentum, further weighing on the score. However, a positive earnings call with strong growth in key areas provides some optimism. The valuation is moderate, but the lack of a dividend yield limits appeal.

Positive Factors

Bookings and Contracts

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.

Revenue and Margins

The company has strong visibility into near-term revenue dynamics, and achievement of revenue growth in near-term should earn further multiple separation vs rival DXC.

Negative Factors

Audit and Accounting Concerns

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

Audit and Financial Integrity

Audit concerns are related to information technology controls rather than misstated revenue recognition.

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 Incorporated (KD) is a leading global provider of managed services and IT infrastructure solutions, focusing on helping organizations modernize their technology environments. Formed as a spin-off from IBM, Kyndryl specializes in areas such as cloud services, cybersecurity, data management, and digital transformation. The company operates across various sectors, providing a range of services designed to enhance operational efficiency and support clients in their digital journey.

How the Company Makes Money

Kyndryl generates revenue primarily through its managed services contracts, consulting services, and IT infrastructure solutions. Its revenue model is based on long-term contracts with clients, which include fixed-price agreements and time-and-materials contracts. Key revenue streams include cloud services, where Kyndryl helps clients migrate and manage their workloads on public and private cloud platforms; cybersecurity services that protect organizations from digital threats; and data management solutions that optimize clients' data usage and analytics capabilities. Additionally, strategic partnerships with major technology vendors and cloud providers enhance its service offerings and revenue potential, allowing Kyndryl to deliver comprehensive solutions tailored to client needs.

Kyndryl Holdings Incorporation Financial Statement Overview

Summary

Kyndryl Holdings faces significant financial challenges, with declining revenues, high leverage, and cash flow difficulties. While there are some improvements in profitability margins, the company's financial stability is at risk due to high debt levels and poor cash flow performance.

Income Statement

Kyndryl Holdings has faced declining revenues over the past few years, with a significant drop of 33.1% in the latest year. Despite improvements in gross profit margin to 20.87% and a positive net profit margin of 1.67%, the company has struggled with consistent revenue growth and profitability. The EBIT and EBITDA margins have shown some recovery, but overall profitability remains a challenge.

Balance Sheet

The company's balance sheet indicates high leverage, with a debt-to-equity ratio of 3.25, suggesting significant reliance on debt financing. Return on equity has improved to 20.67%, but the equity ratio remains low, indicating potential financial instability. The high debt levels pose a risk to financial health.

Cash Flow

Kyndryl's cash flow situation is concerning, with a dramatic decline in free cash flow growth. The operating cash flow to net income ratio is low at 0.22, indicating challenges in converting income into cash. Although free cash flow to net income is at 1.0, the overall cash flow performance suggests liquidity issues.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	15.06B	15.06B	16.05B	17.03B	18.66B	19.35B
Gross Profit	3.13B	3.14B	2.86B	2.53B	2.09B	2.11B
EBITDA	1.26B	1.55B	1.14B	617.00M	-175.00M	-175.00M
Net Income	296.00M	252.00M	-340.00M	-1.37B	-2.32B	-2.01B
Balance Sheet
Total Assets	11.49B	10.45B	10.59B	11.46B	13.21B	11.21B
Cash, Cash Equivalents and Short-Term Investments	1.47B	1.79B	1.55B	1.85B	2.22B	24.00M
Total Debt	4.03B	3.96B	4.14B	4.24B	4.60B	1.39B
Total Liabilities	10.15B	9.12B	9.47B	10.00B	10.45B	6.28B
Stockholders Equity	1.23B	1.22B	1.01B	1.36B	2.77B	4.87B
Cash Flow
Free Cash Flow	240.00M	942.00M	-197.00M	-84.00M	-871.00M	-408.00M
Operating Cash Flow	866.00M	942.00M	454.00M	781.00M	-119.00M	628.00M
Investing Cash Flow	-312.00M	-404.00M	-553.00M	-835.00M	-572.00M	-953.00M
Financing Cash Flow	-405.00M	-286.00M	-170.00M	-141.00M	2.92B	312.00M

Kyndryl Holdings Incorporation Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 31.77
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KD, the sentiment is Negative. The current price of 31.77 is above the 20-day moving average (MA) of 30.74, below the 50-day MA of 35.91, and below the 200-day MA of 35.98, indicating a neutral trend. The MACD of -0.99 indicates Negative momentum. The RSI at 44.58 is Neutral, neither overbought nor oversold. The STOCH value of 77.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KD.

Kyndryl Holdings Incorporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
G	79 Outperform	$7.82B	14.89	21.86%	1.43%	7.37%	-14.64%
EPAM	75 Outperform	$9.36B	23.97	11.36%	―	9.73%	-0.29%
IBM	72 Outperform	$230.25B	39.59	22.73%	2.71%	2.69%	-31.73%
DXC	71 Outperform	$2.60B	7.07	12.60%	―	-4.93%	497.03%
CACI	68 Neutral	$10.62B	21.01	13.49%	―	12.64%	19.79%
Sector *	61 Neutral	$35.51B	8.11	-11.05%	1.89%	8.55%	-8.72%
KD	48 Neutral	$7.21B	26.17	26.55%	―	-3.44%	―

Kyndryl Holdings Incorporation Corporate Events

Kyndryl Holdings Elects Directors and Approves Auditor

At the Annual Meeting on July 31, 2025, Kyndryl Holdings Incorporation‘s stockholders elected directors, approved executive compensation, and ratified PricewaterhouseCoopers LLP as the independent auditor for the fiscal year ending March 31, 2026. The election of directors saw overwhelming support, with each nominee receiving over 99% of the votes. Additionally, 97.4% of votes approved the executive compensation, and 99.4% ratified the appointment of the accounting firm, indicating strong shareholder confidence in the company’s leadership and financial oversight.