Will Softer Results and Hedge Fund Moves Challenge Kyndryl’s (KD) Long-Term Narrative?

• In the past quarter, Greenlight Capital highlighted that Kyndryl Holdings' latest financial results were less impressive than previous quarters, with the company reversing earlier gains according to its third-quarter 2025 investor letter.
• A unique insight is that hedge fund portfolios holding Kyndryl declined from 39 to 36 by the end of the second quarter, signaling shifting investor confidence in response to recent performance concerns.
• We'll explore how the softer quarterly performance and reduced hedge fund interest may impact Kyndryl's longer-term investment narrative.

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Kyndryl Holdings Investment Narrative Recap

To be a shareholder in Kyndryl Holdings, you need to believe in the company's ability to shift its revenue base away from legacy contracts towards higher-margin, modern IT and cloud services. The latest report from Greenlight Capital and the decline in hedge fund interest signal some near-term investor caution, but they do not appear to materially impact the most important short term catalyst: ongoing growth in consulting and hyperscaler-driven segments. The biggest immediate risk remains the pace at which legacy contracts and non-renewals weigh on top-line momentum.

Among recent developments, Kyndryl’s ongoing share repurchases stand out as particularly relevant. Despite softer quarterly results, the company completed a significant US$65 million share buyback in the same period, potentially a sign of confidence in the long-term growth strategy anchored in newer, higher-margin business. How this aligns with investor sentiment around revenue erosion and emerging risks continues to be a key area of focus.

By contrast, it’s important for investors to be aware that a slower-than-expected transition from older, lower-margin contracts could...

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

Kyndryl Holdings' narrative projects $16.7 billion revenue and $1.1 billion earnings by 2028. This requires 3.6% yearly revenue growth and an earnings increase of $803 million from $297 million today.

Uncover how Kyndryl Holdings' forecasts yield a $43.00 fair value, a 49% upside to its current price.

Exploring Other Perspectives

Seven members of the Simply Wall St Community provided fair value estimates for Kyndryl, ranging from US$26.06 to US$89.40 per share. As you consider these differing views, keep in mind the risk that legacy contract run-off and delayed deal signings could limit revenue growth and affect near-term performance.

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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