Kyndryl (KD): Revisiting Valuation After New AI and Quantum-Safe Security Initiatives

Kyndryl Holdings (KD) has been busy reshaping its story around AI and next generation security, from quantum safe assessments to agentic AI for mainframes, and the stock is starting to reflect that pivot.

See our latest analysis for Kyndryl Holdings.

Those AI and quantum safe moves are landing just as sentiment starts to turn, with a roughly 14 percent 1 month share price return partially offsetting a weak year to date. At the same time, the 3 year total shareholder return above 140 percent signals that longer term momentum is still very much intact.

If Kyndryl has you thinking about where else enterprise tech is evolving fast, this is a good moment to discover high growth tech and AI stocks for more potential ideas.

Yet with the shares still trading at a steep discount to analyst targets and intrinsic value even after the recent rebound, the real puzzle now is whether Kyndryl is an overlooked AI and security compounder, or if the market has already priced in the next leg of growth.

Most Popular Narrative: 28.3% Undervalued

With Kyndryl last closing at 26.95 dollars against a narrative fair value of 37.60 dollars, the gap hinges on how investors view its profit and growth trajectory.

The company's focus on expanding AI, data, and cybersecurity services supported by investments in proprietary initiatives like Kyndryl Bridge and new alliances such as Databricks is allowing Kyndryl to address rising complexity and security requirements, supporting both higher margins and new revenue streams.

Read the complete narrative.

To see what is embedded behind that optimism, from margin lift to earnings power, plus the valuation multiple that ties it all together, explore the full narrative and see how the pieces connect.

Result: Fair Value of $37.60 (UNDERVALUED)

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

However, persistent exposure to legacy contracts and unpredictable large account transitions could delay revenue mix improvement and challenge the pace of margin and earnings expansion.

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

Build Your Own Kyndryl Holdings Narrative

If you see the story differently or want to dig into the numbers yourself, you can build a personalized view of Kyndryl in just a few minutes: Do it your way.

A great starting point for your Kyndryl Holdings research is our analysis highlighting 4 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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