Kyndryl Holdings, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

It's been a pretty great week for Kyndryl Holdings, Inc. (NYSE:KD) shareholders, with its shares surging 14% to US$42.96 in the week since its latest quarterly results. It looks like a credible result overall - although revenues of US$3.7b were what the analysts expected, Kyndryl Holdings surprised by delivering a (statutory) profit of US$0.89 per share, an impressive 241% above what was forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Kyndryl Holdings after the latest results.

Check out our latest analysis for Kyndryl Holdings

Following last week's earnings report, Kyndryl Holdings' five analysts are forecasting 2026 revenues to be US$15.1b, approximately in line with the last 12 months. Per-share earnings are expected to soar 154% to US$1.51. In the lead-up to this report, the analysts had been modelling revenues of US$15.4b and earnings per share (EPS) of US$1.41 in 2026. So the consensus seems to have become somewhat more optimistic on Kyndryl Holdings' earnings potential following these results.

The consensus price target rose 16% to US$44.60, suggesting that higher earnings estimates flow through to the stock's valuation as well. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Kyndryl Holdings analyst has a price target of US$46.00 per share, while the most pessimistic values it at US$43.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. From these estimates it looks as though the analysts expect the years of declining revenue to come to an end, given the flat forecast out to 2026. That would be a definite improvement, given that the past five years have seen revenue shrink 6.2% annually. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 9.4% per year. So it's pretty clear that, although revenues are improving, Kyndryl Holdings is still expected to grow slower than the industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Kyndryl Holdings following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Kyndryl Holdings' revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Kyndryl Holdings. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Kyndryl Holdings analysts - going out to 2027, and you can see them free on our platform here.

Even so, be aware that Kyndryl Holdings is showing 2 warning signs in our investment analysis , and 1 of those doesn't sit too well with us...

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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.