Kyndryl Holdings Incorporation (KD) AI Stock Analysis

• Market Cap: $6.62B
• Dividend Yield: N/A
• Average Volume (3M): 2.06M
• Price to Earnings (P/E): 23.1
• Beta (1Y): 1.50
• Revenue Growth: -3.44%
• EPS Growth: N/A
• Country: US
• Employees: 80,000
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 0.37
• Shares Outstanding: 231,143,970
• 10 Day Avg. Volume: 1,785,970
• 30 Day Avg. Volume: 2,064,817
• PEG Ratio: -0.17
• Price to Book (P/B): 5.96
• Price to Sales (P/S): 0.48
• P/FCF Ratio: 7.72
• Enterprise Value/Market Cap: 1.92
• Enterprise Value/Revenue: 0.84
• Enterprise Value/Gross Profit: 4.06
• Enterprise Value/Ebitda: 6.19
• 1Y Price Target: $42.50
• Price Target Upside: 50.18% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 56 Neutral
• Price Target: $29.00 ▲(2.47% Upside)

Kyndryl Holdings' overall stock score is driven by a mixed financial performance with signs of recovery but high leverage and cash flow concerns. Technical indicators suggest a bearish trend, while valuation is moderate. The earnings call provides a positive outlook with strong strategic progress, partially offsetting other risks.

Positive Factors

Strategic Partnerships

The partnership with VML enhances Kyndryl's service offerings in AI and data, potentially increasing its market competitiveness and customer value proposition.

Revenue Growth in Consulting

Strong growth in consulting revenue indicates successful strategic initiatives and positions Kyndryl well in the IT services market, supporting long-term revenue stability.

Hyperscaler-Related Revenue

Significant growth in hyperscaler-related revenue underscores Kyndryl's ability to capitalize on cloud trends, enhancing its competitive edge and revenue potential.

Negative Factors

High Leverage

High leverage can strain financial flexibility and increase risk, potentially impacting Kyndryl's ability to invest in growth and weather economic downturns.

Declining Free Cash Flow

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

Revenue Decline in Constant Currency

A decline in revenue in constant currency suggests challenges in maintaining growth momentum, which could affect long-term financial performance and market position.

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 shows signs of recovery with improved revenue growth and profitability margins. However, high leverage and declining free cash flow growth present financial risks. The company needs to focus on strengthening its balance sheet and enhancing cash flow generation to ensure long-term stability.

Income Statement

Kyndryl Holdings has shown a positive revenue growth rate of 2.7% in the TTM, reversing the previous declining trend. The gross profit margin has improved to 20.8%, indicating better cost management. However, the net profit margin remains low at 1.97%, suggesting limited profitability. The EBIT and EBITDA margins have improved, reflecting operational efficiency gains.

Balance Sheet

The company's debt-to-equity ratio is high at 3.27, indicating significant leverage, which could pose financial risks. However, the return on equity has improved to 25.67%, showing better utilization of equity. The equity ratio is relatively low, suggesting a higher reliance on debt financing.

Cash Flow

Free cash flow growth has declined by 28.78% in the TTM, raising concerns about cash generation. The operating cash flow to net income ratio is 0.20, indicating moderate cash conversion efficiency. The free cash flow to net income ratio is 0.28, reflecting limited free cash flow relative to net income.

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	2.05B	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: 28.30
• 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 28.3 is below the 20-day moving average (MA) of 29.13, below the 50-day MA of 30.54, and below the 200-day MA of 35.39, indicating a bearish trend. The MACD of -0.93 indicates Negative momentum. The RSI at 38.99 is Neutral, neither overbought nor oversold. The STOCH value of 37.77 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
IBM	77 Outperform	$262.73B	45.75	22.73%	2.38%	2.69%	-31.73%
G	76 Outperform	$7.02B	13.37	21.86%	1.67%	7.37%	-14.64%
CACI	70 Outperform	$11.74B	23.28	13.49%	―	12.64%	19.79%
EPAM	68 Neutral	$8.08B	22.11	11.36%	―	9.73%	-0.29%
DXC	65 Neutral	$2.38B	6.47	12.60%	―	-4.93%	497.03%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
KD	56 Neutral	$6.62B	23.14	26.55%	―	-3.44%	―

Kyndryl Holdings Incorporation Corporate Events

Kyndryl Holdings Reports Strong Q1 Fiscal 2026 Results

Kyndryl Holdings Incorporation, a prominent provider of mission-critical enterprise technology services, specializes in designing, building, managing, and modernizing complex IT infrastructure systems globally. In its first quarter of fiscal 2026, Kyndryl reported revenues of $3.74 billion, with a net income of $56 million, reflecting a significant year-over-year increase. The company also achieved an adjusted EBITDA of $647 million, marking a 16% rise from the previous year. Kyndryl Consult, one of its key growth areas, delivered double-digit revenue growth, contributing to the company’s steady progress. Key financial highlights include a 44% increase in pretax income and a 39% rise in adjusted pretax income. The company’s strategic initiatives, including its alliances with cloud hyperscalers, have shown promising results, with hyperscaler-related revenue increasing by 86% year-over-year. Kyndryl’s commitment to innovation is evident in the launch of its Agentic AI Framework, aimed at enhancing customer adoption of AI solutions. Looking ahead, Kyndryl remains optimistic about achieving its fiscal 2026 objectives, focusing on revenue growth, earnings improvement, and strategic reinvestments.

Kyndryl Holdings Reports Strong Growth Amid Challenges

Kyndryl Holdings Incorporation’s latest earnings call revealed a generally positive sentiment, marked by significant growth in key areas such as adjusted pretax income, Kyndryl Consult revenue, and hyperscaler-related revenue. The company also reported increased customer satisfaction. However, challenges like a decline in constant currency revenue, delayed deals, and reductions in focus account revenue were noted. Despite these setbacks, the positive developments and strategic progress appear to outweigh the challenges, painting an optimistic picture for the company’s future.

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.

The most recent analyst rating on (KD) stock is a Buy with a $33.00 price target. To see the full list of analyst forecasts on Kyndryl Holdings Incorporation stock, see the KD Stock Forecast page.