KYNDRYL HOLDINGS INC (KD) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:KD - US50155Q1004 - Common Stock
27.05 USD
-0.29 (-1.06%)
27.45 USD
+0.4 (+1.48%)
Taking everything into account, KD scores 4 out of 10 in our fundamental rating. KD was compared to 88 industry peers in the IT Services industry. While KD is still in line with the averages on profitability rating, there are concerns on its financial health. KD scores decently on growth, while it is valued quite cheap. This could make an interesting combination.
1. Profitability
1.1 Basic Checks
KD had positive earnings in the past year.
KD had a positive operating cash flow in the past year.
In the past 5 years KD reported 4 times negative net income.
Of the past 5 years KD 4 years had a positive operating cash flow.
1.2 Ratios
KD has a Return On Assets of 3.63%. This is in the better half of the industry: KD outperforms 63.64% of its industry peers.
KD has a Return On Equity of 33.22%. This is amongst the best in the industry. KD outperforms 93.18% of its industry peers.
Looking at the Return On Invested Capital, with a value of 5.69%, KD is in the better half of the industry, outperforming 60.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.63% | ||
| ROE | 33.22% | ||
| ROIC | 5.69% |
ROA(3y)-4.26%
ROA(5y)-9.66%
ROE(3y)-37.82%
ROE(5y)-48.13%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
Looking at the Profit Margin, with a value of 2.72%, KD is in line with its industry, outperforming 52.27% of the companies in the same industry.
KD has a Operating Margin (3.38%) which is in line with its industry peers.
With a Gross Margin value of 21.22%, KD is not doing good in the industry: 79.55% of the companies in the same industry are doing better.
KD's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.38% | ||
| PM (TTM) | 2.72% | ||
| GM | 21.22% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y23.11%
GM growth 5Y10.26%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so KD is destroying value.
Compared to 1 year ago, KD has about the same amount of shares outstanding.
The number of shares outstanding for KD has been increased compared to 5 years ago.
The debt/assets ratio for KD has been reduced compared to a year ago.
2.2 Solvency
KD has an Altman-Z score of 1.63. This is a bad value and indicates that KD is not financially healthy and even has some risk of bankruptcy.
With a Altman-Z score value of 1.63, KD is not doing good in the industry: 62.50% of the companies in the same industry are doing better.
KD has a debt to FCF ratio of 12.93. This is a negative value and a sign of low solvency as KD would need 12.93 years to pay back of all of its debts.
The Debt to FCF ratio of KD (12.93) is comparable to the rest of the industry.
KD has a Debt/Equity ratio of 2.45. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 2.45, KD is not doing good in the industry: 75.00% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.45 | ||
| Debt/FCF | 12.93 | ||
| Altman-Z | 1.63 |
ROIC/WACC0.69
WACC8.2%
2.3 Liquidity
KD has a Current Ratio of 1.02. This is a normal value and indicates that KD is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.02, KD is not doing good in the industry: 77.27% of the companies in the same industry are doing better.
A Quick Ratio of 1.02 indicates that KD should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.02, KD is not doing good in the industry: 76.14% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.02 | ||
| Quick Ratio | 1.02 |
3. Growth
3.1 Past
KD shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 592.31%, which is quite impressive.
The Revenue has decreased by -1.90% in the past year.
KD shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -5.78% yearly.
EPS 1Y (TTM)592.31%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%300%
Revenue 1Y (TTM)-1.9%
Revenue growth 3Y-6.9%
Revenue growth 5Y-5.78%
Sales Q2Q%-1.4%
3.2 Future
KD is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 64.58% yearly.
Based on estimates for the next years, KD will show a small growth in Revenue. The Revenue will grow by 2.93% on average per year.
EPS Next Y132%
EPS Next 2Y90.11%
EPS Next 3Y64.58%
EPS Next 5YN/A
Revenue Next Year3.47%
Revenue Next 2Y3.53%
Revenue Next 3Y3.28%
Revenue Next 5Y2.93%
3.3 Evolution
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
KD is valuated correctly with a Price/Earnings ratio of 14.09.
Based on the Price/Earnings ratio, KD is valued a bit cheaper than the industry average as 78.41% of the companies are valued more expensively.
KD is valuated rather cheaply when we compare the Price/Earnings ratio to 27.30, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 7.27 indicates a rather cheap valuation of KD.
93.18% of the companies in the same industry are more expensive than KD, based on the Price/Forward Earnings ratio.
KD's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 24.04.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.09 | ||
| Fwd PE | 7.27 |
4.2 Price Multiples
KD's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. KD is cheaper than 89.77% of the companies in the same industry.
KD's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.55 | ||
| EV/EBITDA | 7 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as KD's earnings are expected to grow with 64.58% in the coming years.
PEG (NY)0.11
PEG (5Y)N/A
EPS Next 2Y90.11%
EPS Next 3Y64.58%
5. Dividend
5.1 Amount
No dividends for KD!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
27.05
-0.29 (-1.06%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners84.75%
Inst Owner Change-0.01%
Ins Owners1.33%
Ins Owner Change-0.84%
Market Cap6.18B
Revenue(TTM)15.01B
Net Income(TTM)408.00M
Analysts84.29
Price Target38.46 (42.18%)
Short Float %8.03%
Short Ratio7.97
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)6.86%
Min EPS beat(2)3.2%
Max EPS beat(2)10.53%
EPS beat(4)3
Avg EPS beat(4)55.66%
Min EPS beat(4)-23.42%
Max EPS beat(4)232.34%
EPS beat(8)7
Avg EPS beat(8)51.84%
EPS beat(12)10
Avg EPS beat(12)30.14%
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)0
Avg Revenue beat(2)-5.13%
Min Revenue beat(2)-5.92%
Max Revenue beat(2)-4.34%
Revenue beat(4)0
Avg Revenue beat(4)-4.28%
Min Revenue beat(4)-5.92%
Max Revenue beat(4)-2.24%
Revenue beat(8)0
Avg Revenue beat(8)-3.24%
Revenue beat(12)2
Avg Revenue beat(12)-1.8%
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)0%
PT rev (3m)-12.03%
EPS NQ rev (1m)-3.3%
EPS NQ rev (3m)-2.79%
EPS NY rev (1m)0%
EPS NY rev (3m)4.27%
Revenue NQ rev (1m)-1.18%
Revenue NQ rev (3m)-1.98%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.28%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.09 | ||
| Fwd PE | 7.27 | ||
| P/S | 0.41 | ||
| P/FCF | 25.55 | ||
| P/OCF | 7.16 | ||
| P/B | 5.03 | ||
| P/tB | 22.98 | ||
| EV/EBITDA | 7 |
EPS(TTM)1.92
EY7.1%
EPS(NY)3.72
Fwd EY13.76%
FCF(TTM)1.06
FCFY3.91%
OCF(TTM)3.78
OCFY13.96%
SpS65.66
BVpS5.37
TBVpS1.18
PEG (NY)0.11
PEG (5Y)N/A
Graham Number15.23
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.63% | ||
| ROE | 33.22% | ||
| ROCE | 7.21% | ||
| ROIC | 5.69% | ||
| ROICexc | 7.02% | ||
| ROICexgc | 8.44% | ||
| OM | 3.38% | ||
| PM (TTM) | 2.72% | ||
| GM | 21.22% | ||
| FCFM | 1.61% |
ROA(3y)-4.26%
ROA(5y)-9.66%
ROE(3y)-37.82%
ROE(5y)-48.13%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexgc growth 3YN/A
ROICexgc growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y23.11%
GM growth 5Y10.26%
F-Score7
Asset Turnover1.33
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.45 | ||
| Debt/FCF | 12.93 | ||
| Debt/EBITDA | 2.61 | ||
| Cap/Depr | 96.88% | ||
| Cap/Sales | 4.14% | ||
| Interest Coverage | 4.34 | ||
| Cash Conversion | 75.11% | ||
| Profit Quality | 59.31% | ||
| Current Ratio | 1.02 | ||
| Quick Ratio | 1.02 | ||
| Altman-Z | 1.63 |
F-Score7
WACC8.2%
ROIC/WACC0.69
Cap/Depr(3y)84.82%
Cap/Depr(5y)73.06%
Cap/Sales(3y)4.38%
Cap/Sales(5y)4.51%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)592.31%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%300%
EPS Next Y132%
EPS Next 2Y90.11%
EPS Next 3Y64.58%
EPS Next 5YN/A
Revenue 1Y (TTM)-1.9%
Revenue growth 3Y-6.9%
Revenue growth 5Y-5.78%
Sales Q2Q%-1.4%
Revenue Next Year3.47%
Revenue Next 2Y3.53%
Revenue Next 3Y3.28%
Revenue Next 5Y2.93%
EBIT growth 1Y374.77%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year382.85%
EBIT Next 3Y79.86%
EBIT Next 5Y31.72%
FCF growth 1Y147.36%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y429.45%
OCF growth 3YN/A
OCF growth 5Y-3.66%
KYNDRYL HOLDINGS INC / KD FAQ
Can you provide the ChartMill fundamental rating for KYNDRYL HOLDINGS INC?
ChartMill assigns a fundamental rating of 4 / 10 to KD.
What is the valuation status of KYNDRYL HOLDINGS INC (KD) stock?
ChartMill assigns a valuation rating of 7 / 10 to KYNDRYL HOLDINGS INC (KD). This can be considered as Undervalued.
Can you provide the profitability details for KYNDRYL HOLDINGS INC?
KYNDRYL HOLDINGS INC (KD) has a profitability rating of 4 / 10.
What are the PE and PB ratios of KYNDRYL HOLDINGS INC (KD) stock?
The Price/Earnings (PE) ratio for KYNDRYL HOLDINGS INC (KD) is 14.09 and the Price/Book (PB) ratio is 5.03.
What is the earnings growth outlook for KYNDRYL HOLDINGS INC?
The Earnings per Share (EPS) of KYNDRYL HOLDINGS INC (KD) is expected to grow by 132% in the next year.