KYNDRYL HOLDINGS INC (KD) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:KD - US50155Q1004 - Common Stock
26.56 USD
-0.03 (-0.11%)
26.9 USD
+0.34 (+1.28%)
KD gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 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 may be a bit undervalued, certainly considering the very reasonable score on growth
1. Profitability
1.1 Basic Checks
In the past year KD was profitable.
KD had a positive operating cash flow in the past year.
KD had negative earnings in 4 of the past 5 years.
KD had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
KD has a better Return On Assets (3.63%) than 63.64% of its industry peers.
Looking at the Return On Equity, with a value of 33.22%, KD belongs to the top of the industry, outperforming 93.18% of the companies in the same industry.
The Return On Invested Capital of KD (5.69%) is better than 60.23% of its industry peers.
| 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
KD has a Profit Margin (2.72%) which is comparable to the rest of the industry.
With a Operating Margin value of 3.38%, KD perfoms like the industry average, outperforming 48.86% of the companies in the same industry.
KD has a worse Gross Margin (21.22%) than 78.41% of its industry peers.
In the last couple of years the Gross Margin of KD has grown nicely.
| 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
KD has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for KD remains at a similar level compared to 1 year ago.
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 1.62. This is a bad value and indicates that KD is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of KD (1.62) is worse than 62.50% of its industry peers.
The Debt to FCF ratio of KD is 12.93, which is on the high side as it means it would take KD, 12.93 years of fcf income to pay off all of its debts.
KD's Debt to FCF ratio of 12.93 is in line compared to the rest of the industry. KD outperforms 43.18% of its industry peers.
KD has a Debt/Equity ratio of 2.45. This is a high value indicating a heavy dependency on external financing.
KD's Debt to Equity ratio of 2.45 is on the low side compared to the rest of the industry. KD is outperformed by 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.45 | ||
| Debt/FCF | 12.93 | ||
| Altman-Z | 1.62 |
ROIC/WACC0.69
WACC8.23%
2.3 Liquidity
A Current Ratio of 1.02 indicates that KD should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.02, KD is doing worse than 76.14% of the companies in the same industry.
KD has a Quick 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.
KD has a Quick ratio of 1.02. This is in the lower half of the industry: KD underperforms 75.00% of its industry peers.
| 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.
Measured over the past years, KD shows a decrease in Revenue. The Revenue has been decreasing by -5.78% on average per year.
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
Based on estimates for the next years, KD will show a very strong growth in Earnings Per Share. The EPS will grow by 64.58% on average per year.
KD is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.93% yearly.
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
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 13.83, KD is valued correctly.
KD's Price/Earnings ratio is a bit cheaper when compared to the industry. KD is cheaper than 79.55% of the companies in the same industry.
KD is valuated rather cheaply when we compare the Price/Earnings ratio to 26.51, which is the current average of the S&P500 Index.
KD is valuated cheaply with a Price/Forward Earnings ratio of 7.14.
94.32% of the companies in the same industry are more expensive than KD, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 23.13. KD is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.83 | ||
| Fwd PE | 7.14 |
4.2 Price Multiples
88.64% of the companies in the same industry are more expensive than KD, based on the Enterprise Value to EBITDA ratio.
KD's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.09 | ||
| EV/EBITDA | 6.85 |
4.3 Compensation for Growth
KD's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
KD's earnings are expected to grow with 64.58% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.1
PEG (5Y)N/A
EPS Next 2Y90.11%
EPS Next 3Y64.58%
5. Dividend
5.1 Amount
KD does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
26.56
-0.03 (-0.11%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners84.72%
Inst Owner Change4.04%
Ins Owners1.36%
Ins Owner Change-0.84%
Market Cap6.07B
Revenue(TTM)15.01B
Net Income(TTM)408.00M
Analysts84.29
Price Target38.46 (44.8%)
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)-3.93%
PT rev (3m)-19.11%
EPS NQ rev (1m)3.87%
EPS NQ rev (3m)-5.29%
EPS NY rev (1m)9.54%
EPS NY rev (3m)4.27%
Revenue NQ rev (1m)-1.28%
Revenue NQ rev (3m)-2.36%
Revenue NY rev (1m)-0.37%
Revenue NY rev (3m)-0.48%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.83 | ||
| Fwd PE | 7.14 | ||
| P/S | 0.4 | ||
| P/FCF | 25.09 | ||
| P/OCF | 7.03 | ||
| P/B | 4.94 | ||
| P/tB | 22.57 | ||
| EV/EBITDA | 6.85 |
EPS(TTM)1.92
EY7.23%
EPS(NY)3.72
Fwd EY14.02%
FCF(TTM)1.06
FCFY3.99%
OCF(TTM)3.78
OCFY14.22%
SpS65.66
BVpS5.37
TBVpS1.18
PEG (NY)0.1
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 | 1.62 |
F-Score7
WACC8.23%
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 13.83 and the Price/Book (PB) ratio is 4.94.
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.