KYNDRYL HOLDINGS INC (KD) Stock Fundamental Analysis

USA • New York Stock Exchange • NYSE:KD • US50155Q1004

23.56 USD

+0.56 (+2.43%)

Last: Feb 2, 2026, 12:54 PM

Fundamental Rating

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.

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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.
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.
With an excellent Return On Equity value of 33.22%, KD belongs to the best of the industry, outperforming 92.05% of the companies in the same industry.
KD has a better Return On Invested Capital (5.69%) 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

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.
The Operating Margin of KD (3.38%) is comparable to the rest of the industry.
KD has a worse Gross Margin (21.22%) than 79.55% of its industry peers.
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%

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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.
Compared to 5 years ago, KD has more shares outstanding
KD has a better debt/assets ratio than last year.

2.2 Solvency

KD has an Altman-Z score of 1.57. 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 1.57, KD is not doing good in the industry: 62.50% of the companies in the same industry are doing better.
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 42.05% 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 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	1.57

ROIC/WACC0.68

WACC8.37%

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.
KD has a Current ratio of 1.02. This is in the lower half of the industry: KD underperforms 77.27% of its industry peers.
A Quick Ratio of 1.02 indicates that KD should not have too much problems paying its short term obligations.
KD has a worse Quick ratio (1.02) than 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

The Earnings Per Share has grown by an impressive 592.31% over the past year.
Looking at the last year, KD shows a decrease in Revenue. The Revenue has decreased by -1.90% in the last year.
The Revenue has been decreasing by -5.78% on average over the past years.

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

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.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 12.27 indicates a correct valuation of KD.
Based on the Price/Earnings ratio, KD is valued cheaply inside the industry as 82.95% of the companies are valued more expensively.
KD is valuated cheaply when we compare the Price/Earnings ratio to 28.32, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 6.33 indicates a rather cheap valuation of KD.
Based on the Price/Forward Earnings ratio, KD is valued cheaply inside the industry as 94.32% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 25.57. KD is valued rather cheaply when compared to this.

		Industry Rank	Sector Rank
PE	12.27
Fwd PE	6.33

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.
The rest of the industry has a similar Price/Free Cash Flow ratio as KD.

		Industry Rank	Sector Rank
P/FCF	22.25
EV/EBITDA	6.14

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.
KD's earnings are expected to grow with 64.58% in the coming years. This may justify a more expensive valuation.