Kyndryl Holdings, Inc. (NYSE:KD) Has Found A Path To Profitability

Kyndryl Holdings, Inc. (NYSE:KD) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Kyndryl Holdings, Inc. operates as a technology services company and IT infrastructure services provider worldwide. With the latest financial year loss of US$340m and a trailing-twelve-month loss of US$188m, the US$5.6b market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Kyndryl Holdings will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for Kyndryl Holdings

According to the 4 industry analysts covering Kyndryl Holdings, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of US$144m in 2025. Therefore, the company is expected to breakeven roughly a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 85% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Kyndryl Holdings' growth isn’t the focus of this broad overview, though, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one issue worth mentioning. Kyndryl Holdings currently has a 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 around investing in the loss-making company.

Next Steps:

There are key fundamentals of Kyndryl Holdings which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Kyndryl Holdings, take a look at Kyndryl Holdings' company page on Simply Wall St. We've also compiled a list of pertinent aspects you should look at:

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.

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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.