KYNDRYL HOLDINGS INC (KD) Stock Fundamental Analysis
USA - NYSE:KD - US50155Q1004 - Common Stock
32 USD
+0.05 (+0.16%)
32.1 USD
+0.1 (+0.31%)
We assign a fundamental rating of 3 out of 10 to KD. KD was compared to 86 industry peers in the IT Services industry. Both the profitability and financial health of KD have multiple concerns. 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.
In the past year KD had a positive cash flow from operations.
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 comparable to the rest of the industry.
KD's Return On Equity of 24.09% is amongst the best of the industry. KD outperforms 88.37% of its industry peers.
KD has a Return On Invested Capital of 4.45%. This is comparable to the rest of the industry: KD outperforms 54.65% 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
With a Profit Margin value of 1.97%, KD perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
KD has a Operating Margin of 2.72%. This is comparable to the rest of the industry: KD outperforms 46.51% of its industry peers.
KD has a Gross Margin of 20.81%. This is amonst the worse of the industry: KD underperforms 82.56% 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
KD has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for KD remains at a similar level compared to 1 year ago.
Compared to 5 years ago, KD has more shares outstanding
KD has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.64, we must say that KD is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 1.64, KD is not doing good in the industry: 65.12% of the companies in the same industry are doing better.
The Debt to FCF ratio of KD is 13.26, which is on the high side as it means it would take KD, 13.26 years of fcf income to pay off all of its debts.
KD has a Debt to FCF ratio (13.26) which is in line with its industry peers.
KD has a Debt/Equity ratio of 2.44. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of KD (2.44) is worse than 80.23% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.44 | ||
| Debt/FCF | 13.26 | ||
| Altman-Z | 1.64 |
ROIC/WACC0.53
WACC8.47%
2.3 Liquidity
A Current Ratio of 1.05 indicates that KD should not have too much problems paying its short term obligations.
KD's Current ratio of 1.05 is on the low side compared to the rest of the industry. KD is outperformed by 76.74% 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 74.42% 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.
Looking at the last year, KD shows a decrease in Revenue. The Revenue has decreased by -3.44% in the last 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
KD is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 64.52% yearly.
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 3Y64.52%
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 23.70.
KD's Price/Earnings is on the same level as the industry average.
KD's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.27.
With a Price/Forward Earnings ratio of 9.11, the valuation of KD can be described as very reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of KD indicates a rather cheap valuation: KD is cheaper than 93.02% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of KD to the average of the S&P500 Index (22.77), we can say KD is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.7 | ||
| Fwd PE | 9.11 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, KD is valued cheaply inside the industry as 91.86% of the companies are valued more expensively.
The rest of the industry has a similar Price/Free Cash Flow ratio as KD.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.21 | ||
| EV/EBITDA | 5.8 |
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.
A more expensive valuation may be justified as KD's earnings are expected to grow with 64.52% in the coming years.
PEG (NY)0.19
PEG (5Y)N/A
EPS Next 2Y84.66%
EPS Next 3Y64.52%
5. Dividend
5.1 Amount
KD does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
32
+0.05 (+0.16%)
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 Cap7.40B
Analysts84.62
Price Target47.54 (48.56%)
Short Float %6.5%
Short Ratio5.53
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)-3.62%
PT rev (3m)6.96%
EPS NQ rev (1m)0%
EPS NQ rev (3m)27.17%
EPS NY rev (1m)26.56%
EPS NY rev (3m)15.89%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)2.81%
Revenue NY rev (1m)0.97%
Revenue NY rev (3m)0.51%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.7 | ||
| Fwd PE | 9.11 | ||
| P/S | 0.49 | ||
| P/FCF | 31.21 | ||
| P/OCF | 8.57 | ||
| P/B | 6 | ||
| P/tB | 27.19 | ||
| EV/EBITDA | 5.8 |
EPS(TTM)1.35
EY4.22%
EPS(NY)3.51
Fwd EY10.98%
FCF(TTM)1.03
FCFY3.2%
OCF(TTM)3.73
OCFY11.67%
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 | 1.64 |
F-Score8
WACC8.47%
ROIC/WACC0.53
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 3Y64.52%
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%