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Kyndryl Holdings, Inc. (NYSE:KD) About To Shift From Loss To Profit

We feel now is a pretty good time to analyse Kyndryl Holdings, Inc.'s (NYSE:KD) business as it appears the company may be on the cusp of a considerable accomplishment. Kyndryl Holdings, Inc. operates as a technology services company and IT infrastructure services provider worldwide. On 31 March 2024, the US$6.1b market-cap company posted a loss of US$340m for its most recent financial year. As path to profitability is the topic on Kyndryl Holdings' investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Kyndryl Holdings

Kyndryl Holdings is bordering on breakeven, according to the 4 American IT analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$188m in 2025. Therefore, the company is expected to breakeven roughly a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 80% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

Underlying developments driving Kyndryl Holdings' growth isn’t the focus of this broad overview, however, keep in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

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One thing we would like to bring into light with Kyndryl Holdings is its debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of Kyndryl Holdings to cover in one brief article, but the key fundamentals for the company can all be found in one place – Kyndryl Holdings' company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further examine:

  1. Valuation: What is Kyndryl Holdings worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Kyndryl Holdings is currently mispriced by the market.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Kyndryl Holdings’s board and the CEO’s background.

  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.