The Bull Case For Kyndryl Holdings (KD) Could Change Following Swing to Profitability and Reaffirmed Revenue Guidance

• Kyndryl Holdings recently reported results for the quarter and six months ended September 30, 2025, showing a move to net income of US$68 million for the quarter, up from a net loss a year earlier, and reaffirmed guidance for revenue growth through March 2026.
• This marks a key turnaround for the company, as both quarterly and first-half earnings swung from losses to profits despite a modest decline in sales, while management highlighted expectations for stronger revenue in the second half supported by its record pipeline and consulting growth.
• We'll examine how Kyndryl's shift to profitability and optimism for upcoming revenue affect its overall investment narrative.

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Kyndryl Holdings Investment Narrative Recap

For investors to own Kyndryl Holdings, they need to believe the company's transition to profitability, anchored by expanding digital consulting and cloud services, can offset gradual declines from legacy contracts and support durable growth. The latest quarterly earnings, showing a notable swing to net income despite slightly lower sales, reinforce management's view of accelerating revenue ahead, though the main catalyst remains execution on new signings while the biggest short-term risk is ongoing exposure to legacy revenue pressures, especially from slow-to-transition focus accounts; these results do little to materially reduce that core risk. Among the recent announcements, Kyndryl’s reaffirmation of its fiscal 2026 revenue growth guidance remains highly relevant. This confirmation indicates the company sees enough momentum in its consulting pipeline and backlog to support improving second-half sales, aligning closely with the short-term catalyst around deal conversion and robust revenue from newer, higher-margin contracts. But in contrast, investors should be aware that almost a third of Kyndryl’s revenues still depend on legacy contracts, which means ...

Read the full narrative on Kyndryl Holdings (it's free!)

Kyndryl Holdings is projected to reach $16.7 billion in revenue and $1.1 billion in earnings by 2028. This outlook is based on an expected 3.6% annual revenue growth rate and a $803 million increase in earnings from the current figure of $297 million.

Uncover how Kyndryl Holdings' forecasts yield a $43.00 fair value, a 57% upside to its current price.

Exploring Other Perspectives

Seven recent fair value estimates from the Simply Wall St Community range widely from US$26.06 to US$88.79 per share. While many see upside, execution on replacing legacy revenue streams continues to be a critical variable that could shape Kyndryl’s trajectory, check out how other users are factoring this into their views.

Explore 7 other fair value estimates on Kyndryl Holdings - why the stock might be worth over 3x more than the current price!

Build Your Own Kyndryl Holdings Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• 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.
• Our free Kyndryl Holdings research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Kyndryl Holdings' overall financial health at a glance.

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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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