KYNDRYL HOLDINGS INC (KD) Stock Fundamental Analysis
NYSE:KD - US50155Q1004 - Common Stock
31.2 USD
+0.78 (+2.56%)
31.16 USD
-0.04 (-0.13%)
We assign a fundamental rating of 3 out of 10 to KD. KD was compared to 83 industry peers in the IT Services industry. KD has a bad profitability rating. Also its financial health evaluation is rather negative. KD is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
KD had positive earnings in the past year.
KD had a positive operating cash flow in the past year.
KD had negative earnings in 4 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 (2.58%) which is in line with its industry peers.
KD's Return On Equity of 24.09% is amongst the best of the industry. KD outperforms 89.16% of its industry peers.
Looking at the Return On Invested Capital, with a value of 4.45%, KD is in line with its industry, outperforming 54.22% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.58% | ||
| ROE | 24.09% | ||
| ROIC | 4.45% |
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 1.97%, KD is in line with its industry, outperforming 50.60% of the companies in the same industry.
KD has a Operating Margin (2.72%) which is comparable to the rest of the industry.
KD has a worse Gross Margin (20.81%) than 83.13% of its industry peers.
In the last couple of years the Gross Margin of KD has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 2.72% | ||
| PM (TTM) | 1.97% | ||
| GM | 20.81% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y23.11%
GM growth 5Y10.26%
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 about the same amout of shares outstanding than it did 1 year ago.
KD has more shares outstanding than it did 5 years ago.
KD has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.63, we must say that KD is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 1.63, KD is not doing good in the industry: 65.06% of the companies in the same industry are doing better.
KD has a debt to FCF ratio of 13.26. This is a negative value and a sign of low solvency as KD would need 13.26 years to pay back of all of its debts.
The Debt to FCF ratio of KD (13.26) is comparable to the rest of the industry.
KD has a Debt/Equity ratio of 2.44. This is a high value indicating a heavy dependency on external financing.
KD has a Debt to Equity ratio of 2.44. This is amonst the worse of the industry: KD underperforms 80.72% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.44 | ||
| Debt/FCF | 13.26 | ||
| Altman-Z | 1.63 |
ROIC/WACC0.54
WACC8.31%
2.3 Liquidity
A Current Ratio of 1.05 indicates that KD should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.05, KD is doing worse than 77.11% of the companies in the same industry.
A Quick Ratio of 1.05 indicates that KD should not have too much problems paying its short term obligations.
KD has a Quick ratio of 1.05. This is in the lower half of the industry: KD underperforms 74.70% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.05 | ||
| Quick Ratio | 1.05 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 264.63% over the past year.
The Revenue has decreased by -3.44% in the past year.
Measured over the past years, KD shows a decrease in Revenue. The Revenue has been decreasing by -5.78% on average per year.
EPS 1Y (TTM)264.63%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%640%
Revenue 1Y (TTM)-3.44%
Revenue growth 3Y-6.9%
Revenue growth 5Y-5.78%
Sales Q2Q%0.11%
3.2 Future
The Earnings Per Share is expected to grow by 65.37% on average over the next years. This is a very strong growth
Based on estimates for the next years, KD will show a small growth in Revenue. The Revenue will grow by 2.93% on average per year.
EPS Next Y122.5%
EPS Next 2Y84.66%
EPS Next 3Y65.37%
EPS Next 5YN/A
Revenue Next Year3.97%
Revenue Next 2Y3.29%
Revenue Next 3Y3.37%
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.
4. Valuation
4.1 Price/Earnings Ratio
KD is valuated rather expensively with a Price/Earnings ratio of 23.11.
KD's Price/Earnings ratio is in line with the industry average.
KD's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.24.
KD is valuated reasonably with a Price/Forward Earnings ratio of 8.88.
Compared to the rest of the industry, the Price/Forward Earnings ratio of KD indicates a rather cheap valuation: KD is cheaper than 93.98% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 35.82. KD is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.11 | ||
| Fwd PE | 8.88 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, KD is valued cheaply inside the industry as 90.36% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of KD is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.43 | ||
| EV/EBITDA | 5.69 |
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 65.37% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.19
PEG (5Y)N/A
EPS Next 2Y84.66%
EPS Next 3Y65.37%
5. Dividend
5.1 Amount
KD does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
31.2
+0.78 (+2.56%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners79.82%
Inst Owner Change-0.66%
Ins Owners1.41%
Ins Owner Change4.27%
Market Cap7.21B
Analysts84.62
Price Target47.54 (52.37%)
Short Float %5.21%
Short Ratio4.75
Dividend
| Industry Rank | Sector 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)1
Avg EPS beat(2)-3.77%
Min EPS beat(2)-23.42%
Max EPS beat(2)15.88%
EPS beat(4)3
Avg EPS beat(4)61.82%
Min EPS beat(4)-23.42%
Max EPS beat(4)232.34%
EPS beat(8)7
Avg EPS beat(8)53.08%
EPS beat(12)9
Avg EPS beat(12)26.78%
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)0
Avg Revenue beat(2)-3.29%
Min Revenue beat(2)-4.34%
Max Revenue beat(2)-2.24%
Revenue beat(4)0
Avg Revenue beat(4)-3.2%
Min Revenue beat(4)-4.61%
Max Revenue beat(4)-1.62%
Revenue beat(8)1
Avg Revenue beat(8)-2.5%
Revenue beat(12)2
Avg Revenue beat(12)-1.4%
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)-1.85%
PT rev (3m)8.96%
EPS NQ rev (1m)6.85%
EPS NQ rev (3m)27.17%
EPS NY rev (1m)26.56%
EPS NY rev (3m)15.89%
Revenue NQ rev (1m)-0.33%
Revenue NQ rev (3m)2.81%
Revenue NY rev (1m)0.89%
Revenue NY rev (3m)0.55%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.11 | ||
| Fwd PE | 8.88 | ||
| P/S | 0.48 | ||
| P/FCF | 30.43 | ||
| P/OCF | 8.36 | ||
| P/B | 5.85 | ||
| P/tB | 26.51 | ||
| EV/EBITDA | 5.69 |
EPS(TTM)1.35
EY4.33%
EPS(NY)3.51
Fwd EY11.26%
FCF(TTM)1.03
FCFY3.29%
OCF(TTM)3.73
OCFY11.97%
SpS65.16
BVpS5.33
TBVpS1.18
PEG (NY)0.19
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.58% | ||
| ROE | 24.09% | ||
| ROCE | 5.64% | ||
| ROIC | 4.45% | ||
| ROICexc | 5.58% | ||
| ROICexgc | 6.69% | ||
| OM | 2.72% | ||
| PM (TTM) | 1.97% | ||
| GM | 20.81% | ||
| FCFM | 1.57% |
ROA(3y)-4.26%
ROA(5y)-9.66%
ROE(3y)-37.82%
ROE(5y)-48.13%
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 3Y23.11%
GM growth 5Y10.26%
F-Score8
Asset Turnover1.31
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.44 | ||
| Debt/FCF | 13.26 | ||
| Debt/EBITDA | 1.93 | ||
| Cap/Depr | 54.25% | ||
| Cap/Sales | 4.16% | ||
| Interest Coverage | 3.47 | ||
| Cash Conversion | 55.21% | ||
| Profit Quality | 79.8% | ||
| Current Ratio | 1.05 | ||
| Quick Ratio | 1.05 | ||
| Altman-Z | 1.63 |
F-Score8
WACC8.31%
ROIC/WACC0.54
Cap/Depr(3y)68.65%
Cap/Depr(5y)63.36%
Cap/Sales(3y)4.38%
Cap/Sales(5y)4.51%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)264.63%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%640%
EPS Next Y122.5%
EPS Next 2Y84.66%
EPS Next 3Y65.37%
EPS Next 5YN/A
Revenue 1Y (TTM)-3.44%
Revenue growth 3Y-6.9%
Revenue growth 5Y-5.78%
Sales Q2Q%0.11%
Revenue Next Year3.97%
Revenue Next 2Y3.29%
Revenue Next 3Y3.37%
Revenue Next 5Y2.93%
EBIT growth 1Y617.54%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year382.85%
EBIT Next 3Y80.84%
EBIT Next 5Y31.72%
FCF growth 1Y192.58%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y173.1%
OCF growth 3YN/A
OCF growth 5Y-3.66%