One-glance verdict
Within fair range
$6.94 our estimate vs market $13.15
Wall Street consensus: $14.20 (104.5% higher than our fair-value estimate)
89% above our estimate
Fundamentals snapshot
Kyndryl Holdings, Inc.
KD · NYQ · Technology · Information Technology Services
Current price
$13.15
52-week range
$10.10 - $32.53
Market cap
$2.86B
Balance sheet
Distressed
7.13x Adequate
Net debt $2.83B. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
1 Risk
2 rewards · 1 risks
- Reward Returns 6.9% on equity, ahead of 25% of its peers.
- Reward Free cash flow was positive in 3/10 years.
- Risk Stock trades 56.8% above its 5-year average P/E.
What this company does
Kyndryl Holdings, Inc.
Kyndryl acts as an expert IT department for large companies, managing their essential technology like cloud computing, data, and security. The company makes its money from long-term contracts to run these critical systems, which creates a steady source of income because its customers depend on these services for their daily operations.
How the company got here
Kyndryl was created in November 2021 when it was spun off from IBM, a long-standing technology giant. For many years, the business that is now Kyndryl was a part of IBM that managed the essential, behind-the-scenes technology for large companies. IBM decided to separate this unit to allow it to focus more on newer areas like artificial intelligence and cloud computing. This separation allows Kyndryl to work with a wider range of technology partners, including some of IBM's competitors, which it couldn't do before.
What it actually does
Think of Kyndryl as the expert mechanics for the complex computer systems that big companies rely on every day. They don't sell laptops or phones to individual consumers. Instead, they design, build, manage, and modernize the massive, critical technology infrastructure for large organizations like banks, hospitals, and manufacturers. This includes everything from managing huge data centers to ensuring a company's cloud computing setup is secure and efficient, and helping employees' workplace technology run smoothly.
Cloud Services
Many companies today use the 'cloud'—which just means they run their software and store their data on powerful computers owned by companies like Amazon, Microsoft, or Google. Kyndryl helps its customers move to the cloud, manage their systems once they are there, and ensure everything runs smoothly and securely. This is a significant part of their business, as many large companies have very complex needs, sometimes using multiple different cloud providers at once.
Core Enterprise and zCloud
This part of the business is focused on managing the foundational, core computer systems that large companies have relied on for a long time, including powerful mainframe computers. Many established banks, insurance companies, and retailers still use these incredibly reliable systems for their most important tasks. Kyndryl takes on the responsibility of keeping these essential systems running, modernizing them, and making sure they work well with newer technologies.
Applications, Data, and AI
Beyond just the hardware, Kyndryl helps companies with the software applications that run their business and the vast amounts of data they collect. This includes updating older applications to work more efficiently and helping businesses use their data to make smarter decisions. A growing piece of this is helping customers adopt artificial intelligence (AI) to automate tasks and find new opportunities.
Digital Workplace Services
This segment focuses on the technology that employees use every day to do their jobs. Kyndryl helps large companies manage their employees' computers, software, and the networks they connect to, whether they are in the office or working from home. The goal is to make sure tens of thousands of employees can work productively and securely.
Security and Resiliency
In today's world, protecting computer systems from cyberattacks is incredibly important. Kyndryl provides services to help companies secure their technology and data from threats. It also helps them create backup plans and systems so they can recover quickly if something goes wrong, like a natural disaster or a major technical failure. This is a crucial service for industries like finance and healthcare where system downtime (a period when a system is unavailable) can have serious consequences.
Network and Edge Services
This involves managing the complex networks that connect a company's offices, data centers, and cloud systems all over the world. It also includes a newer area called 'edge' computing, which involves placing computer power closer to where it's actually needed, like in a factory or a retail store, to make things run faster. Kyndryl designs, builds, and manages these networks to ensure they are fast and reliable.
What management is betting on now
Since becoming independent, Kyndryl's main focus has been on forming new partnerships with major technology players like Microsoft, Google, and Amazon. This allows them to offer customers a wider range of solutions instead of being tied to just IBM's products. They are also investing in growing their consulting services, called Kyndryl Consult, to provide more expert advice to clients on how to modernize their technology. A key part of their strategy is to help customers move to the cloud and use data and artificial intelligence to improve their businesses, which are seen as major growth areas.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q2
$15.00M
FY2025 Q3
$151.00M
FY2025 Q4
$341.00M
FY2026 Q1
$-267.00M
FY2026 Q2
$17.00M
FY2026 Q3
$208.00M
FY2026 Q4
$382.00M
FY2027 Q1
$-459.00M
Revenue
$3.62B
Net income
—
Diluted EPS
-0.25
Operating cash flow
$-310.00M
Free cash flow
$-459.00M
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Sources
Revenue
$3.77B
Net income
—
Diluted EPS
0.08
Operating cash flow
$498.00M
Free cash flow
$382.00M
Fetching…
Sources
Revenue
$3.86B
Net income
—
Diluted EPS
0.25
Operating cash flow
$428.00M
Free cash flow
$208.00M
Fetching…
Sources
Revenue
$3.72B
Net income
—
Diluted EPS
0.29
Operating cash flow
$146.00M
Free cash flow
$17.00M
Fetching…
Sources
Revenue
$3.74B
Net income
—
Diluted EPS
0.23
Operating cash flow
$-124.00M
Free cash flow
$-267.00M
Fetching…
Sources
Revenue
$3.80B
Net income
—
Diluted EPS
0.30
Operating cash flow
$581.00M
Free cash flow
$341.00M
Fetching…
Sources
Revenue
$3.74B
Net income
—
Diluted EPS
0.89
Operating cash flow
$260.00M
Free cash flow
$151.00M
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Sources
Revenue
$3.77B
Net income
—
Diluted EPS
-0.19
Operating cash flow
$149.00M
Free cash flow
$15.00M
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Sources
Is it cheap or expensive?
Fair value $6.94 vs current price $13.15
Wall Street consensus is the average analyst price target: $14.20 (104.5% higher than our fair-value estimate).
Our most-likely fair value is $6.94 a share — about 47.2% away from today's price of $13.15, so the stock currently looks fairly priced.
Is it drowning in debt?
Distressed
Net debt $2.8B. Interest coverage 7.1x.
Net debt
$2.83B
Interest coverage
7.13x
Kyndryl Holdings, Inc.'s profit covers its interest bill about 7.1 times over. which is stronger than every peer shown here.
Distressed
Worse cushion
Baseline
Better cushion
KD
BASELINE
Kyndryl Holdings, Inc.
Total debt $4.93B Interest coverage 7.13x This is the baseline the peer rows are being compared against.
Total debt $4.17B Interest coverage 1.39x -81% vs KD Carries about 5.1x less debt cushion than KD.
Total debt $1.74B Interest coverage 4.43x -38% vs KD Carries about 1.6x less debt cushion than KD.
Total debt $2.70B Interest coverage 4.07x -43% vs KD Carries about 1.8x less debt cushion than KD.
Total debt $758.80M Interest coverage 2.50x -65% vs KD Carries about 2.9x less debt cushion than KD.
What you should know
The case for and against KD
2 Rewards
1 Risk
Rewards
-
Returns 6.9% on equity, ahead of 25% of its peers.
-
Free cash flow was positive in 3/10 years.
Risks
-
Stock trades 56.8% above its 5-year average P/E.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
35.54x
Forward P/E
5.28x
P/B
2.70x
P/S
0.19x
EV/EBITDA
4.42x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
21.8%
Operating margin
2.9%
Net margin
0.6%
ROE
6.9%
ROA
3.0%
Health
Liquidity and balance-sheet strength
Debt / equity
4.22x
Current ratio
0.85x
Quick ratio
0.57x
Total debt
$4.93B
Total cash
$2.10B
Growth
How the business has been compounding
Revenue TTM
$14.97B
Revenue 5Y CAGR
35.9%
EPS TTM
0.37
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$762.00M
Free CF TTM
$340.00M
FCF margin
2.3%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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