Kyndryl Holdings Incorporation (KD) AI Stock Analysis

• Market Cap: $6.34B
• Dividend Yield: N/A
• Average Volume (3M): 1.94M
• Price to Earnings (P/E): 22.4
• Beta (1Y): 1.52
• Revenue Growth: -1.90%
• EPS Growth: N/A
• Country: US
• Employees: 80,000
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 0.38
• Shares Outstanding: 231,143,970
• 10 Day Avg. Volume: 1,929,830
• 30 Day Avg. Volume: 1,938,833
• PEG Ratio: -0.17
• Price to Book (P/B): 5.96
• Price to Sales (P/S): 0.48
• P/FCF Ratio: 21.57
• Enterprise Value/Market Cap: 0.00
• Enterprise Value/Revenue: 0.00
• Enterprise Value/Gross Profit: 0.00
• Enterprise Value/Ebitda: 0.00
• 1Y Price Target: $34.00
• Price Target Upside: 30.07% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 58 Neutral
• Price Target: $29.00 ▲(10.94% Upside)

Kyndryl Holdings' overall stock score is driven by a mix of financial recovery and strategic initiatives, balanced by high leverage and declining cash flow. The earnings call provided a positive outlook with margin expansion and revenue growth in strategic areas, but technical indicators suggest current bearish momentum. The valuation is moderate, with room for improvement in profitability and cash flow generation.

Positive Factors

Margin Expansion

Margin expansion indicates improved operational efficiency and cost management, enhancing profitability and providing a buffer against market volatility.

Strategic Acquisition

The acquisition expands Kyndryl's capabilities in the sovereign cloud market, strengthening its competitive position and service offerings in Europe.

Growth in Kyndryl Consult

Strong growth in Kyndryl Consult demonstrates successful expansion in consulting services, driving revenue and enhancing client relationships.

Negative Factors

High Leverage

High leverage can limit financial flexibility and increase risk, potentially impacting the company's ability to invest in growth opportunities.

Declining Free Cash Flow

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

Revenue Below Expectations

Revenue shortfalls can signal challenges in sales execution or market demand, potentially affecting future growth and profitability.

Kyndryl Holdings Incorporation Business Overview & Revenue Model

Company Description

Kyndryl Holdings, Inc. operates as a technology services company and IT infrastructure services provider worldwide. The company offers cloud services; core enterprise and cloud services; application, data, and artificial intelligence services; digital workplace services; security and resiliency services; and network services and edge services. It serves financial, telecommunications, retail, automobile, and transportation industries. The company was incorporated in 2020 and is headquartered in New York, New York.

How the Company Makes Money

Kyndryl generates revenue primarily through long-term service contracts with clients, providing a range of IT infrastructure services such as cloud management, data center operations, network management, and cybersecurity solutions. The company's revenue model is based on both project-based fees and recurring charges for managed services, which create a stable income stream. Key revenue streams include consulting services for digital transformation initiatives, ongoing maintenance contracts for IT systems, and partnerships with major technology providers that enhance its service offerings. Additionally, Kyndryl leverages its extensive industry expertise to deliver tailored solutions, fostering long-term relationships that contribute to sustained earnings.

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	15.01B	15.06B	16.05B	17.03B	18.66B	19.35B
Gross Profit	3.19B	3.14B	2.86B	2.53B	2.09B	2.11B
EBITDA	1.22B	1.55B	1.14B	617.00M	-175.00M	-175.00M
Net Income	407.00M	252.00M	-340.00M	-1.37B	-2.32B	-2.01B
Balance Sheet
Total Assets	400.00M	10.45B	10.59B	11.46B	13.21B	11.21B
Cash, Cash Equivalents and Short-Term Investments	22.00M	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	9.90B	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	514.00M	337.00M	-197.00M	-84.00M	-871.00M	-408.00M
Operating Cash Flow	863.00M	942.00M	454.00M	781.00M	-119.00M	628.00M
Investing Cash Flow	-359.00M	-404.00M	-553.00M	-835.00M	-572.00M	-953.00M
Financing Cash Flow	-495.00M	-286.00M	-170.00M	-141.00M	2.92B	312.00M

Kyndryl Holdings Incorporation Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 26.14
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• 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 26.14 is below the 20-day moving average (MA) of 28.19, below the 50-day MA of 30.08, and below the 200-day MA of 34.91, indicating a bearish trend. The MACD of -0.67 indicates Positive momentum. The RSI at 28.33 is Positive, neither overbought nor oversold. The STOCH value of 29.96 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
CACI	78 Outperform	$12.91B	25.82	13.14%	―	12.61%	11.85%
EPAM	77 Outperform	$8.83B	22.59	11.36%	―	9.73%	-0.29%
IBM	77 Outperform	$281.22B	35.99	30.25%	2.38%	4.51%	21.89%
G	71 Outperform	$6.70B	12.75	21.86%	1.71%	7.37%	-14.64%
DXC	62 Neutral	$2.36B	6.82	12.33%	―	-4.13%	2143.48%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
KD	58 Neutral	$6.34B	22.43	―	―	-1.90%	―

Kyndryl Holdings Incorporation Corporate Events

Kyndryl Holdings Reports Strong Q2 Fiscal 2026 Results

Kyndryl Holdings Incorporation is a leading provider of mission-critical enterprise technology services, specializing in IT infrastructure services across more than 60 countries. The company focuses on designing, building, managing, and modernizing complex information systems.

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.