2024-06-12 15:24:32 ET
Summary
- Kyndryl came public via a spin-out from IBM in November 2021.
- Initially, the risk-reward trade-off was very compelling, offering deep value buyers an outstanding opportunity if management delivered on a modest self-help plan.
- The stock has risen about 40% from the date of the spin, and over 200% off the bottom.
- To management’s credit, the story has largely played out as intended, but consistent profitable growth will be a tougher task, and the higher valuation leaves less room for upside given the FCF outlook.
- We recommend taking profits in the stock and are lowering our rating to Hold.
Introduction
Read the full article on Seeking Alpha
For further details see:
Kyndryl: Good Work With A Poor Asset; Time To Ring The Register (Rating Downgrade)