We assign a fundamental rating of 4 out of 10 to KD. KD was compared to 88 industry peers in the IT Services industry. KD has a medium profitability rating, but doesn't score so well on its financial health evaluation. KD is valued quite cheap, while showing a decent growth score. This is a good combination!

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

KD had positive earnings in the past year.
In the past year KD had a positive cash flow from operations.
In the past 5 years KD reported 4 times negative net income.
KD had a positive operating cash flow in 4 of the past 5 years.

1.2 Ratios

The Return On Assets of KD (3.63%) is better than 63.64% of its industry peers.
The Return On Equity of KD (33.22%) is better than 92.05% of its industry peers.
With a decent Return On Invested Capital value of 5.69%, KD is doing good in 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

KD's Profit Margin of 2.72% is in line compared to the rest of the industry. KD outperforms 52.27% of its industry peers.
Looking at the Operating Margin, with a value of 3.38%, KD is in line with its industry, outperforming 48.86% of the companies in the same industry.
KD has a worse Gross Margin (21.22%) than 79.55% 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%

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ROA

ROE

ROIC

Operating and Profit Margin

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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.
Compared to 1 year ago, KD has an improved debt to assets ratio.

2.2 Solvency

KD has an Altman-Z score of 1.59. 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 1.59, 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.
With a Debt to FCF ratio value of 12.93, KD perfoms like the industry average, outperforming 42.05% of the companies in the same industry.
KD has a Debt/Equity ratio of 2.45. This is a high value indicating a heavy dependency on external financing.
KD has a worse Debt to Equity ratio (2.45) than 75.00% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	2.45
Debt/FCF	12.93
Altman-Z	1.59

ROIC/WACC0.68

WACC8.42%

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.
Looking at the Current ratio, with a value of 1.02, KD is doing worse than 77.27% of the companies in the same industry.
A Quick Ratio of 1.02 indicates that KD should not have too much problems paying its short term obligations.
KD has a Quick ratio of 1.02. This is in the lower half of the industry: KD underperforms 76.14% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.02
Quick Ratio	1.02

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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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.
KD shows a decrease in Revenue. In the last year, the revenue decreased by -1.90%.
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

The Earnings Per Share is expected to grow by 64.58% on average over the next years. This is a very strong growth
KD is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.93% yearly.

EPS Next Y132.2%

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.

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4. Valuation

4.1 Price/Earnings Ratio

KD is valuated correctly with a Price/Earnings ratio of 12.73.
KD's Price/Earnings ratio is rather cheap when compared to the industry. KD is cheaper than 81.82% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.25. KD is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 6.57, the valuation of KD can be described as very cheap.
94.32% of the companies in the same industry are more expensive than KD, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of KD to the average of the S&P500 Index (25.98), we can say KD is valued rather cheaply.

		Industry Rank	Sector Rank
PE	12.73
Fwd PE	6.57

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, KD is valued cheaper than 92.05% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, KD is valued a bit cheaper than 60.23% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	23.09
EV/EBITDA	6.43

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.