Kyndryl Holdings Inc. Common Stock (KD)

FairStock Score: 57/100 — STEADY

Key Financials

Strengths

• Generates $2.7 billion in annual free cash flow (90.6% yield on market cap)
• Strong Piotroski F-Score of 7/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• Solid return on equity of 19.9% above cost of capital
• Established organization with 73,000 employees providing operational scale

Concerns

• High leverage at 3.04x debt-to-equity increases financial risk and interest expense burden
• Altman Z-Score of 0.3 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Kyndryl Holdings Inc. Common Stock is a small-cap technology company valued at $3.0 billion. The business generates $15.1 billion in annual revenue with a 0.4% net margin and $2.7 billion in free cash flow. From a quality standpoint, Kyndryl shows solid Piotroski F-Score of 7/9 and distressed Altman Z-Score of 0.3 warrants caution. On valuation, the stock is attractively valued at 12.8x earnings, with trades above its Graham Number with a negative 20% margin. Growth dynamics show revenue growing at 3.1% and profit growth of -73.5%. Our composite FairStock Score of 57/100 reflects mixed fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

The market underappreciates Kyndryl's consistent 20% ROE at just 13x earnings—a re-rating toward sector peers could unlock 30-50% upside. With $2.7 billion in annual free cash flow (90.6% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Elevated leverage at 3.0x D/E means rising interest rates or revenue weakness could strain debt covenants and force asset sales at distressed prices. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer