Kyndryl Holdings (KD): Evaluating Valuation on Recent Share Price Movement and Growth Signals

Kyndryl Holdings (KD) shares have shown some movement over the past week, gaining nearly 2% and extending their one-year total return to about 26%. Many investors are watching to see if recent trends can keep the momentum going.

See our latest analysis for Kyndryl Holdings.

Kyndryl’s 1-year total shareholder return of nearly 26% stands out, even as the share price has pulled back about 18% year-to-date. While momentum was softer over the past quarter, recent gains suggest renewed investor optimism as the company navigates fresh developments.

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But with Kyndryl’s shares still trading at a notable discount to analyst targets and recent growth in net income, investors may wonder if the market is overlooking long-term potential or if all future upside is already priced in.

Most Popular Narrative: 32.7% Undervalued

With Kyndryl Holdings closing at $28.92, which is well below the most popular narrative's fair value estimate of $43, the narrative points to substantial upside if key projections unfold as expected.

The accelerating adoption of hybrid and multi-cloud environments is fueling demand for Kyndryl's advanced integration and management services, as evidenced by a 44% year-over-year increase in signings and substantial growth in hyperscaler-related revenues. This supports ongoing revenue expansion and a higher recurring revenue base.

Read the complete narrative.

What drives such a bullish outlook? It all comes down to ambitious forecasts for revenue growth, margin expansion, and big moves in future profit multiples. Will Kyndryl deliver these numbers and reward bold believers? Only a deeper look inside the narrative reveals the projections behind this eye-catching valuation.

Result: Fair Value of $43 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, prolonged reliance on legacy contracts and possible delays in winning new deals could still put pressure on revenue growth and margins going forward.

Find out about the key risks to this Kyndryl Holdings narrative.

Another View: Market Ratios Paint a Different Picture

Looking at valuation through the lens of price-to-earnings, Kyndryl trades at 22.5x, which is higher than the average of 15.2x for its peers but below the US IT industry average of 29.4x. Compared to its fair ratio of 53.4x, the gap suggests potential upside, but also highlights valuation risk if sentiment shifts. Will the market eventually reward these multiples, or is caution justified?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Kyndryl Holdings Narrative

If you see the story differently or want to dive deeper into the numbers, you can craft your own view in just a few minutes. Do it your way

A great starting point for your Kyndryl Holdings research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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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.

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