KD - Kyndryl: Expect Another Solid Quarter But Not Enthused About Going Long Here

2024-02-01 12:51:10 ET

Summary

• Kyndryl Holdings Inc. has seen its stock price outperform the tech-heavy Nasdaq, delivering over 5x returns in the last 6 months.
• For the Q3 results due to be announced on the February 6, key numbers to watch are a GAAP EPS of -$0.26 and a revenue figure of $3.92 billion.
• KD's focus on high-margin offerings, a greater thrust towards automation, and potentially lower working capital spend could all be key highlights in Q3.
• Consensus EBITDA estimates for next year have already been lifted by 22% over the past 6 months, whilst the stock is priced at a premium on a forward EV/EBITDA basis.
• The reward to risk on the charts does not look enticing.

Introduction

The stock of the world's largest IT infra services provider- Kyndryl Holdings, Inc. ( KD ), has been on a tear over the last six months. At a time when the tech-heavy Nasdaq has only facilitated +9% returns, KD has delivered over 5x that figure....

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