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KYNDRYL HOLDINGS INC (KD) Stock Fundamental Analysis

NYSE:KD - New York Stock Exchange, Inc. - US50155Q1004 - Common Stock - Currency: USD

39.92  +1.96 (+5.16%)

After market: 39.65 -0.27 (-0.68%)

Fundamental Rating

2

Taking everything into account, KD scores 2 out of 10 in our fundamental rating. KD was compared to 82 industry peers in the IT Services industry. KD may be in some trouble as it scores bad on both profitability and health. While showing a medium growth rate, KD is valued expensive at the moment.


Dividend Valuation Growth Profitability Health

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3

1. Profitability

1.1 Basic Checks

In the past year KD was profitable.
In the past year KD had a positive cash flow from operations.
In the past 5 years KD always reported negative net income.
Of the past 5 years KD 4 years had a positive operating cash flow.
KD Yearly Net Income VS EBIT VS OCF VS FCFKD Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2018 2019 2020 2021 2022 2023 2024 0 1B -1B -2B

1.2 Ratios

With a Return On Assets value of -0.86%, KD perfoms like the industry average, outperforming 45.57% of the companies in the same industry.
With a Return On Equity value of -8.36%, KD perfoms like the industry average, outperforming 44.30% of the companies in the same industry.
With a Return On Invested Capital value of 1.38%, KD perfoms like the industry average, outperforming 50.63% of the companies in the same industry.
Industry RankSector Rank
ROA -0.86%
ROE -8.36%
ROIC 1.38%
ROA(3y)-10.92%
ROA(5y)-11.74%
ROE(3y)-73.36%
ROE(5y)-55.47%
ROIC(3y)N/A
ROIC(5y)N/A
KD Yearly ROA, ROE, ROICKD Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2018 2019 2020 2021 2022 2023 2024 -20 -40 -60 -80 -100

1.3 Margins

With a Operating Margin value of 0.70%, KD perfoms like the industry average, outperforming 44.30% of the companies in the same industry.
With a Gross Margin value of 19.76%, KD is not doing good in the industry: 83.54% of the companies in the same industry are doing better.
In the last couple of years the Gross Margin of KD has grown nicely.
Industry RankSector Rank
OM 0.7%
PM (TTM) N/A
GM 19.76%
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y16.04%
GM growth 5Y8.73%
KD Yearly Profit, Operating, Gross MarginsKD Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2018 2019 2020 2021 2022 2023 2024 0 10 -10

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1

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 has been increased compared to 1 year ago.
KD has more shares outstanding than it did 5 years ago.
KD has a worse debt/assets ratio than last year.
KD Yearly Shares OutstandingKD Yearly Shares OutstandingYearly Shares Outstanding 2019 2020 2021 2022 2023 2024 50M 100M 150M 200M
KD Yearly Total Debt VS Total AssetsKD Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2019 2020 2021 2022 2023 2024 2B 4B 6B 8B 10B

2.2 Solvency

KD has an Altman-Z score of 1.77. This is a bad value and indicates that KD is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.77, KD is doing worse than 63.29% of the companies in the same industry.
KD has a debt to FCF ratio of 64.82. This is a negative value and a sign of low solvency as KD would need 64.82 years to pay back of all of its debts.
With a Debt to FCF ratio value of 64.82, KD is not doing good in the industry: 63.29% of the companies in the same industry are doing better.
KD has a Debt/Equity ratio of 2.92. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 2.92, KD is not doing good in the industry: 83.54% of the companies in the same industry are doing better.
Industry RankSector Rank
Debt/Equity 2.92
Debt/FCF 64.82
Altman-Z 1.77
ROIC/WACC0.13
WACC10.76%
KD Yearly LT Debt VS Equity VS FCFKD Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2018 2019 2020 2021 2022 2023 2024 0 2B 4B

2.3 Liquidity

KD has a Current Ratio of 1.03. This is a normal value and indicates that KD is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of KD (1.03) is worse than 77.22% of its industry peers.
A Quick Ratio of 1.03 indicates that KD should not have too much problems paying its short term obligations.
KD's Quick ratio of 1.03 is on the low side compared to the rest of the industry. KD is outperformed by 73.42% of its industry peers.
Industry RankSector Rank
Current Ratio 1.03
Quick Ratio 1.03
KD Yearly Current Assets VS Current LiabilitesKD Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2019 2020 2021 2022 2023 2024 1B 2B 3B 4B 5B

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4

3. Growth

3.1 Past

KD shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 104.35%, which is quite impressive.
The Revenue has decreased by -5.72% in the past year.
The Revenue has been decreasing by -5.93% on average over the past years.
EPS 1Y (TTM)104.35%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%1120%
Revenue 1Y (TTM)-5.72%
Revenue growth 3Y-6.04%
Revenue growth 5Y-5.93%
Sales Q2Q%-4.88%

3.2 Future

The Earnings Per Share is expected to grow by 64.79% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 1.51% on average over the next years.
EPS Next Y168.96%
EPS Next 2Y94.54%
EPS Next 3Y77.07%
EPS Next 5Y64.79%
Revenue Next Year-4.44%
Revenue Next 2Y-1.56%
Revenue Next 3Y-0.26%
Revenue Next 5Y1.51%

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.
KD Yearly Revenue VS EstimatesKD Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 5B 10B 15B 20B
KD Yearly EPS VS EstimatesKD Yearly EPS VS EstimatesYearly EPS VS Estimates 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 0 2 -2 4 -4 -6

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3

4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 234.82, KD can be considered very expensive at the moment.
Based on the Price/Earnings ratio, KD is valued a bit more expensive than 63.29% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.47, KD is valued quite expensively.
With a Price/Forward Earnings ratio of 25.71, KD can be considered very expensive at the moment.
Based on the Price/Forward Earnings ratio, KD is valued a bit cheaper than the industry average as 63.29% of the companies are valued more expensively.
KD is valuated cheaply when we compare the Price/Forward Earnings ratio to 92.74, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 234.82
Fwd PE 25.71
KD Price Earnings VS Forward Price EarningsKD Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 50 100 150 200

4.2 Price Multiples

KD's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. KD is cheaper than 75.95% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, KD is valued a bit more expensive than 60.76% of the companies in the same industry.
Industry RankSector Rank
P/FCF 185.44
EV/EBITDA 13.12
KD Per share dataKD EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 20 40 60

4.3 Compensation for Growth

The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
A more expensive valuation may be justified as KD's earnings are expected to grow with 77.07% in the coming years.
PEG (NY)1.39
PEG (5Y)N/A
EPS Next 2Y94.54%
EPS Next 3Y77.07%

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0

5. Dividend

5.1 Amount

No dividends for KD!.
Industry RankSector Rank
Dividend Yield N/A

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KYNDRYL HOLDINGS INC

NYSE:KD (2/4/2025, 8:04:00 PM)

After market: 39.65 -0.27 (-0.68%)

39.92

+1.96 (+5.16%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)02-03 2025-02-03/amc
Earnings (Next)N/A N/A
Inst Owners73.49%
Inst Owner Change-4.43%
Ins Owners0.79%
Ins Owner Change-0.48%
Market Cap9.27B
Analysts86.15
Price Target39.17 (-1.88%)
Short Float %3.79%
Short Ratio3.75
Dividend
Industry RankSector Rank
Dividend Yield N/A
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)49.51%
Min EPS beat(2)22.49%
Max EPS beat(2)76.52%
EPS beat(4)4
Avg EPS beat(4)48.02%
Min EPS beat(4)11.74%
Max EPS beat(4)81.33%
EPS beat(8)7
Avg EPS beat(8)17.39%
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)0
Avg Revenue beat(2)-2.92%
Min Revenue beat(2)-4.23%
Max Revenue beat(2)-1.62%
Revenue beat(4)0
Avg Revenue beat(4)-2.21%
Min Revenue beat(4)-4.23%
Max Revenue beat(4)-0.59%
Revenue beat(8)2
Avg Revenue beat(8)-0.56%
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)0%
PT rev (3m)20%
EPS NQ rev (1m)-7.83%
EPS NQ rev (3m)103.85%
EPS NY rev (1m)-3.32%
EPS NY rev (3m)-5.03%
Revenue NQ rev (1m)-0.43%
Revenue NQ rev (3m)-1.97%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)-0.08%
Valuation
Industry RankSector Rank
PE 234.82
Fwd PE 25.71
P/S 0.61
P/FCF 185.44
P/OCF 13.6
P/B 8.71
P/tB 193.17
EV/EBITDA 13.12
EPS(TTM)0.17
EY0.43%
EPS(NY)1.55
Fwd EY3.89%
FCF(TTM)0.22
FCFY0.54%
OCF(TTM)2.94
OCFY7.36%
SpS65.87
BVpS4.59
TBVpS0.21
PEG (NY)1.39
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA -0.86%
ROE -8.36%
ROCE 1.74%
ROIC 1.38%
ROICexc 1.75%
ROICexgc 2.22%
OM 0.7%
PM (TTM) N/A
GM 19.76%
FCFM 0.33%
ROA(3y)-10.92%
ROA(5y)-11.74%
ROE(3y)-73.36%
ROE(5y)-55.47%
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
ROICexcg growth 3YN/A
ROICexcg 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 3Y16.04%
GM growth 5Y8.73%
F-Score6
Asset Turnover1.47
Health
Industry RankSector Rank
Debt/Equity 2.92
Debt/FCF 64.82
Debt/EBITDA 3.8
Cap/Depr 88.89%
Cap/Sales 4.13%
Interest Coverage 0.9
Cash Conversion 83.37%
Profit Quality N/A
Current Ratio 1.03
Quick Ratio 1.03
Altman-Z 1.77
F-Score6
WACC10.76%
ROIC/WACC0.13
Cap/Depr(3y)74.34%
Cap/Depr(5y)67.87%
Cap/Sales(3y)4.39%
Cap/Sales(5y)4.88%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)104.35%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%1120%
EPS Next Y168.96%
EPS Next 2Y94.54%
EPS Next 3Y77.07%
EPS Next 5Y64.79%
Revenue 1Y (TTM)-5.72%
Revenue growth 3Y-6.04%
Revenue growth 5Y-5.93%
Sales Q2Q%-4.88%
Revenue Next Year-4.44%
Revenue Next 2Y-1.56%
Revenue Next 3Y-0.26%
Revenue Next 5Y1.51%
EBIT growth 1Y131.1%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year9272.96%
EBIT Next 3Y385.4%
EBIT Next 5Y143.05%
FCF growth 1Y-96.33%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-51.53%
OCF growth 3Y-10.2%
OCF growth 5Y-7.63%