KYNDRYL HOLDINGS INC (KD) Stock Fundamental Analysis
USA - NYSE:KD - US50155Q1004 - Common Stock
30.25 USD
-0.26 (-0.85%)
30.4 USD
+0.15 (+0.5%)
KD gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 86 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.
KD had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
With a Return On Assets value of 2.58%, KD perfoms like the industry average, outperforming 55.17% of the companies in the same industry.
KD's Return On Equity of 24.09% is amongst the best of the industry. KD outperforms 88.51% of its industry peers.
KD's Return On Invested Capital of 4.45% is in line compared to the rest of the industry. KD outperforms 55.17% of its industry peers.
| 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
KD has a Profit Margin (1.97%) which is comparable to the rest of the industry.
KD has a Operating Margin (2.72%) which is comparable to the rest of the industry.
Looking at the Gross Margin, with a value of 20.81%, KD is doing worse than 83.91% of the companies in the same industry.
KD's Gross Margin has improved in the last couple of years.
| 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.
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.
KD has a better debt/assets ratio than last year.
2.2 Solvency
KD has an Altman-Z score of 1.62. This is a bad value and indicates that KD is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.62, KD is doing worse than 67.82% of the companies in the same industry.
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.
Looking at the Debt to FCF ratio, with a value of 13.26, KD is in line with its industry, outperforming 48.28% of the companies in the same industry.
A Debt/Equity ratio of 2.44 is on the high side and indicates that KD has dependencies on debt financing.
KD has a worse Debt to Equity ratio (2.44) than 80.46% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.44 | ||
| Debt/FCF | 13.26 | ||
| Altman-Z | 1.62 |
ROIC/WACC0.57
WACC7.77%
2.3 Liquidity
KD has a Current Ratio of 1.05. 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 worse Current ratio (1.05) than 77.01% of its industry peers.
KD has a Quick Ratio of 1.05. 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 1.05 is on the low side compared to the rest of the industry. KD is outperformed by 74.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.05 | ||
| Quick Ratio | 1.05 |
3. Growth
3.1 Past
KD shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 264.63%, which is quite impressive.
The Revenue has decreased by -3.44% in the past year.
The Revenue has been decreasing by -5.78% on average over the past years.
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
Based on estimates for the next years, KD will show a very strong growth in Earnings Per Share. The EPS will grow by 61.58% on average per year.
The Revenue is expected to grow by 2.93% on average over the next years.
EPS Next Y122.5%
EPS Next 2Y84.73%
EPS Next 3Y61.58%
EPS Next 5YN/A
Revenue Next Year3.76%
Revenue Next 2Y3.05%
Revenue Next 3Y3.13%
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 22.41.
Based on the Price/Earnings ratio, KD is valued a bit cheaper than 60.92% of the companies in the same industry.
KD is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.86, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 8.61 indicates a reasonable valuation of KD.
94.25% of the companies in the same industry are more expensive than KD, based on the Price/Forward Earnings ratio.
KD is valuated cheaply when we compare the Price/Forward Earnings ratio to 23.32, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.41 | ||
| Fwd PE | 8.61 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of KD indicates a rather cheap valuation: KD is cheaper than 88.51% of the companies listed in the same industry.
KD's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.5 | ||
| EV/EBITDA | 7.46 |
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.
A more expensive valuation may be justified as KD's earnings are expected to grow with 61.58% in the coming years.
PEG (NY)0.18
PEG (5Y)N/A
EPS Next 2Y84.73%
EPS Next 3Y61.58%
5. Dividend
5.1 Amount
No dividends for KD!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
30.25
-0.26 (-0.85%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners80.69%
Inst Owner Change0%
Ins Owners1.35%
Ins Owner Change4.27%
Market Cap6.99B
Analysts83.08
Price Target43.72 (44.53%)
Short Float %7.45%
Short Ratio6.12
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)-8.05%
PT rev (3m)-6.6%
EPS NQ rev (1m)-0.64%
EPS NQ rev (3m)-4.32%
EPS NY rev (1m)0%
EPS NY rev (3m)21.32%
Revenue NQ rev (1m)-0.03%
Revenue NQ rev (3m)-0.93%
Revenue NY rev (1m)-0.2%
Revenue NY rev (3m)0.29%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.41 | ||
| Fwd PE | 8.61 | ||
| P/S | 0.46 | ||
| P/FCF | 29.5 | ||
| P/OCF | 8.1 | ||
| P/B | 5.67 | ||
| P/tB | 25.71 | ||
| EV/EBITDA | 7.46 |
EPS(TTM)1.35
EY4.46%
EPS(NY)3.51
Fwd EY11.62%
FCF(TTM)1.03
FCFY3.39%
OCF(TTM)3.73
OCFY12.34%
SpS65.16
BVpS5.33
TBVpS1.18
PEG (NY)0.18
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 | 2.59 | ||
| Cap/Depr | 83.02% | ||
| Cap/Sales | 4.16% | ||
| Interest Coverage | 3.47 | ||
| Cash Conversion | 74.2% | ||
| Profit Quality | 79.8% | ||
| Current Ratio | 1.05 | ||
| Quick Ratio | 1.05 | ||
| Altman-Z | 1.62 |
F-Score8
WACC7.77%
ROIC/WACC0.57
Cap/Depr(3y)84.82%
Cap/Depr(5y)73.06%
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 2Y84.73%
EPS Next 3Y61.58%
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 Year3.76%
Revenue Next 2Y3.05%
Revenue Next 3Y3.13%
Revenue Next 5Y2.93%
EBIT growth 1Y617.54%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year387.8%
EBIT Next 3Y80.09%
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%