When Will Kyndryl Holdings, Inc. (NYSE:KD) Become Profitable?

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. The US$4.6b market-cap company’s loss lessened since it announced a US$1.4b loss in the full financial year, compared to the latest trailing-twelve-month loss of US$1.1b, as it approaches breakeven. As path to profitability is the topic on Kyndryl Holdings' investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Kyndryl Holdings

Consensus from 4 of the American IT analysts is that Kyndryl Holdings is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of US$131m in 2025. Therefore, the company is expected to breakeven roughly 2 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 114% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Kyndryl Holdings' growth isn’t the focus of this broad overview, but, take into account that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with Kyndryl Holdings is its debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. 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 factors 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.