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Kyndryl Holdings Incorporation
(NYSE:KD)
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Rating:54Neutral
Price Target:
$12.50
▼(-3.99% Downside)
Action:Reiterated
Date:08/05/26
KD’s score is weighed down primarily by financial fundamentals—high leverage, thin margins, and ongoing revenue pressure—despite a clear profitability turnaround. The earnings call adds cautious support via multi-year profit/FCF targets and improving signings mix, but near-term revenue and cash flow headwinds remain. Technically, momentum is positive but looks overbought and still below the 200-day trend, while valuation appears broadly fair at ~15.8x earnings.
Positive Factors
Improving Signings Quality
Higher-margin signings and a gross-profit book-to-bill at or above one indicate that backlog is adding more profit dollars than current delivery consumes, supporting more durable earnings quality and future margin improvement.
Negative Factors
Persistent Revenue Pressure
A declining or stagnant top line limits operating leverage and makes margin recovery more dependent on cost reductions. The outlook suggests that weak demand, longer decisions, and portfolio transition remain relevant beyond a single quarter.
Read all positive and negative factors
Positive Factors
Negative Factors
Improving Signings Quality
Higher-margin signings and a gross-profit book-to-bill at or above one indicate that backlog is adding more profit dollars than current delivery consumes, supporting more durable earnings quality and future margin improvement.
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
$2.93B
Dividend YieldN/A
Average Volume (3M)4.30M
Price to Earnings (P/E)8.8
Beta (1Y)1.53
Revenue Growth-0.62%
EPS Growth-70.92%
CountryUS
Employees72,000
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)1.49
Shares Outstanding217,818,270
10 Day Avg. Volume3,881,454
30 Day Avg. Volume4,302,479
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
$14.50Price Target Upside11.37% Upside
Rating ConsensusHold
Number of Analyst Covering5
EPS Forecast (FY)1.85
Revenue Forecast (FY)$14.80B
Kyndryl Holdings Incorporation Business Overview & Revenue Model
Company Description
Kyndryl Holdings, Inc. functions as a global technology and IT infrastructure services specialist. The firm delivers a comprehensive portfolio of IT solutions, encompassing cloud computing, foundational enterprise platforms, application developmen...
How the Company Makes Money
Kyndryl makes money primarily by selling managed infrastructure services and related professional services to large organizations under contractual arrangements. A significant portion of revenue comes from long-term or recurring engagements to ope...
Kyndryl Holdings Incorporation Earnings Call Summary
Earnings Call Date:Aug 05, 2026
(Q1-2027)
| % Change Since: |
Next Earnings Date:Nov 10, 2026
Earnings Call Sentiment Neutral
The call presented a mixed but pragmatic picture: meaningful progress in higher‑value areas (Kyndryl Consult, hyperscalers, signings quality, Agentic AI and productivity initiatives) and a strong balance sheet underpin long‑term confidence. However, near‑term financials were pressured by a 3% revenue decline, a Q1 adjusted pretax loss driven by sizeable workforce rebalancing charges, and a Q1 free cash flow outflow. Management reiterated fiscal 2027 guidance that assumes continued headwinds from the evolving IBM relationship and included restructuring charges while emphasizing multi‑year targets for significant profitability and free cash flow improvement in fiscal 2028.Positive Updates
Signings Momentum and Large Deal Activity
12‑month signings of $14.2 billion with $3.9 billion signed in Q1; 40 deals > $50 million signed in the last 12 months (10 in Q1). Approximately 30% of the value of those large deals came from scope expansions or new logos vs. 15% in fiscal 2025, indicating improving deal quality and mix.
Negative Updates
Quarterly Revenue Decline
Q1 revenue of $3.6 billion, down 3% year‑over‑year on both reported and constant currency basis. Company expects fiscal 2027 revenue to be flat to down 2% in constant currency, with improvements quarter‑by‑quarter.
Read all updates
Q1-2027 Updates
Positive
Negative
Signings Momentum and Large Deal Activity
12‑month signings of $14.2 billion with $3.9 billion signed in Q1; 40 deals > $50 million signed in the last 12 months (10 in Q1). Approximately 30% of the value of those large deals came from scope expansions or new logos vs. 15% in fiscal 2025, indicating improving deal quality and mix.
Read all positive updates
Company Guidance
Kyndryl reported Q1 revenue of $3.6 billion (‑3% y/y), adjusted EBITDA $512 million, an adjusted pretax loss of $37 million (including $152 million of workforce rebalancing charges that reduced adjusted pretax margin by over 4 points), 12‑month signings of $14.2 billion (with $3.9 billion signed in Q1), Q1 free cash flow outflow of $401 million, hyperscaler‑related revenue >$530 million in the quarter ($2.0 billion over 12 months), cash of $2.1 billion and net leverage of 0.8x; for fiscal 2027 management guides revenue flat to down 2% (constant currency), adjusted pretax income $600–700 million (which assumes roughly $200 million of rebalancing charges and about $200 million of offsetting savings), full‑year free cash flow $400–500 million, Q2 pretax income roughly in line with last year’s $123 million, with workforce actions expected to annualize into $400–500 million of savings in fiscal 2028 and support fiscal 2028 targets of >$1.2 billion adjusted pretax income and $1.0 billion free cash flow on low single‑digit constant‑currency revenue growth.Kyndryl Holdings Incorporation Financial Statement Overview
Summary
Income Statement
56
Neutral
Balance Sheet
38
Negative
Cash Flow
54
Neutral
| Breakdown | TTM | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 26.44B | 15.09B | 15.06B | 16.05B | 17.03B | 18.66B |
| Gross Profit | 5.78B | 3.29B | 3.14B | 2.86B | 2.53B | 2.11B |
| EBITDA | 2.29B | 3.28B | 1.55B | 1.14B | 617.00M | -175.00M |
| Net Income | 340.00M | 198.00M | 252.00M | -340.00M | -1.37B | -2.30B |
Balance Sheet | ||||||
| Total Assets | 12.03B | 12.55B | 10.45B | 10.59B | 11.46B | 13.21B |
| Cash, Cash Equivalents and Short-Term Investments | 2.10B | 2.62B | 1.79B | 1.55B | 1.85B | 2.22B |
| Total Debt | 4.93B | 4.96B | 3.96B | 4.14B | 4.24B | 4.60B |
| Total Liabilities | 10.86B | 11.26B | 9.12B | 9.47B | 10.00B | 10.45B |
| Stockholders Equity | 1.07B | 1.18B | 1.22B | 1.01B | 1.36B | 2.77B |
Cash Flow | ||||||
| Free Cash Flow | 148.00M | 340.00M | 337.00M | -197.00M | -197.00M | -871.00M |
| Operating Cash Flow | 762.00M | 948.00M | 942.00M | 454.00M | 454.00M | -119.00M |
| Investing Cash Flow | -536.00M | -561.00M | -404.00M | -553.00M | -553.00M | -572.00M |
| Financing Cash Flow | 475.00M | 457.00M | -286.00M | -170.00M | -170.00M | 2.92B |
Kyndryl Holdings Incorporation Technical Analysis
Positive
13.02
Price Trends
12.60
Positive
12.58
Positive
16.34
Negative
Market Momentum
0.08
Positive
51.83
Neutral
72.38
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 13.02 is below the 20-day moving average (MA) of 13.14, above the 50-day MA of 12.60, and below the 200-day MA of 16.34, indicating a neutral trend. The MACD of 0.08 indicates Positive momentum. The RSI at 51.83 is Neutral, neither overbought nor oversold. The STOCH value of 72.38 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 |
|---|---|---|---|---|---|---|---|
81 Outperform | $6.38B | 11.09 | 22.91% | 2.29% | 6.89% | 11.22% | |
75 Outperform | $13.77B | 25.93 | 12.68% | ― | 10.89% | 7.95% | |
67 Neutral | $6.08B | 15.70 | 11.19% | ― | 10.76% | 4.93% | |
65 Neutral | $220.34B | 20.21 | 33.52% | 3.14% | 7.90% | 82.11% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
54 Neutral | $2.93B | 8.83 | 29.15% | ― | -0.62% | -70.92% | |
53 Neutral | $1.81B | 14.68 | 4.06% | ― | -2.42% | -65.01% |
* Technology Sector Average
KD
Kyndryl Holdings Incorporation
13.12
-18.89
-59.01%
CACI
Caci International
614.27
144.82
30.85%
EPAM
Epam Systems
117.20
-56.85
-32.66%
G
Genpact
37.49
-6.89
-15.52%
IBM
International Business Machines
231.70
-6.21
-2.61%
DXC
DXC Technology
11.63
-2.87
-19.79%
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...
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.