KYNDRYL HOLDINGS INC (KD)
US50155Q1004 - Common Stock
Taking everything into account, KD scores 2 out of 10 in our fundamental rating. KD was compared to 84 industry peers in the IT Services industry. Both the profitability and financial health of KD have multiple concerns. KD is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year KD has reported negative net income.
KD had a positive operating cash flow in the past year.
KD had negative earnings in each of the past 5 years.
Of the past 5 years KD 4 years had a positive operating cash flow.
1.2 Ratios
KD has a Return On Assets of -0.86%. This is comparable to the rest of the industry: KD outperforms 43.90% of its industry peers.
Looking at the Return On Equity, with a value of -8.36%, KD is in line with its industry, outperforming 43.90% of the companies in the same industry.
KD has a Return On Invested Capital (1.38%) which is comparable to the rest of the industry.
| Industry Rank | Sector 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
1.3 Margins
The Operating Margin of KD (0.70%) is comparable to the rest of the industry.
Looking at the Gross Margin, with a value of 19.76%, KD is doing worse than 85.37% of the companies in the same industry.
KD's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector 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%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), KD is destroying value.
KD has more shares outstanding than it did 1 year ago.
The number of shares outstanding for KD has been increased compared to 5 years ago.
KD has a worse debt/assets ratio than last year.
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.
KD's Altman-Z score of 1.63 is on the low side compared to the rest of the industry. KD is outperformed by 63.41% of its industry peers.
The Debt to FCF ratio of KD is 64.82, which is on the high side as it means it would take KD, 64.82 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of KD (64.82) is comparable to the rest of the industry.
A Debt/Equity ratio of 2.92 is on the high side and indicates that KD has dependencies on debt financing.
The Debt to Equity ratio of KD (2.92) is worse than 85.37% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.92 | ||
| Debt/FCF | 64.82 | ||
| Altman-Z | 1.63 |
ROIC/WACC0.14
WACC9.96%
2.3 Liquidity
A Current Ratio of 1.03 indicates that KD should not have too much problems paying its short term obligations.
KD has a Current ratio of 1.03. This is in the lower half of the industry: KD underperforms 76.83% of its industry peers.
KD has a Quick 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.
KD's Quick ratio of 1.03 is on the low side compared to the rest of the industry. KD is outperformed by 73.17% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.03 | ||
| Quick Ratio | 1.03 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 90.99% over the past year.
Looking at the last year, KD shows a decrease in Revenue. The Revenue has decreased by -9.06% in the last year.
Measured over the past years, KD shows a decrease in Revenue. The Revenue has been decreasing by -5.93% on average per year.
EPS 1Y (TTM)90.99%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%69.35%
Revenue 1Y (TTM)-9.06%
Revenue growth 3Y-6.04%
Revenue growth 5Y-5.93%
Sales Q2Q%-7.34%
3.2 Future
The Earnings Per Share is expected to grow by 73.95% 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 Y162.75%
EPS Next 2Y97.54%
EPS Next 3Y73.95%
EPS Next 5YN/A
Revenue Next Year-4.2%
Revenue Next 2Y-1.27%
Revenue Next 3Y-0.1%
Revenue Next 5Y1.51%
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
KD reported negative earnings for the last year, which makes the Price/Earnings Ratio negative.
KD is valuated rather expensively with a Price/Forward Earnings ratio of 19.63.
Compared to the rest of the industry, the Price/Forward Earnings ratio of KD indicates a somewhat cheap valuation: KD is cheaper than 76.83% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 23.82. KD is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 19.63 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, KD is valued a bit cheaper than 76.83% of the companies in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as KD.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 150.93 | ||
| EV/EBITDA | 10.44 |
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 73.95% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y97.54%
EPS Next 3Y73.95%
5. Dividend
5.1 Amount
No dividends for KD!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
KYNDRYL HOLDINGS INC
NYSE:KD (11/21/2024, 8:04:00 PM)
After market: 32.78 +0.29 (+0.89%)32.49
+3.96 (+13.88%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap7.55B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 19.63 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.86% | ||
| ROE | -8.36% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 0.7% | ||
| PM (TTM) | N/A | ||
| GM | 19.76% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1.47
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.92 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.03 | ||
| Quick Ratio | 1.03 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)90.99%
EPS 3YN/A
EPS 5Y
EPS Q2Q%
EPS Next Y162.75%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-9.06%
Revenue growth 3Y-6.04%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y