Shares of Kyndryl Holdings, Inc. (NYSE: KD) reached a new 52-week low on Tuesday, trading as low as $10.10 after an analyst downgrade by Guggenheim, which shifted its rating from “buy” to “neutral.” The stock closed the day at $10.57, marking a significant drop from its previous close of $23.49. A total of 60,829,172 shares exchanged hands during the trading session.
Analysts have been vocal about their opinions on Kyndryl in recent days. Oppenheimer maintained a “market perform” rating on the stock, while Zacks Research upgraded it from a “strong sell” to a “hold” rating on November 12, 2023. Meanwhile, JPMorgan Chase & Co. downgraded Kyndryl from “overweight” to “underweight,” setting a price target of $16.00. Additionally, Scotiabank initiated coverage with an “outperform” rating on January 27, 2023. Susquehanna also set a target price of $35.00 in a research note on November 6.
As of now, the consensus rating for Kyndryl stands at “hold,” with two analysts recommending a buy, five suggesting a hold, and one advising a sell. The average price target is estimated at $32.80, according to data from MarketBeat.com.
Institutional Investors Adjust Their Holdings
Recent trading activity has also seen movements among institutional investors. Assetmark Inc. increased its stake in Kyndryl by 75.3% during the second quarter, now holding 775 shares valued at approximately $33,000. The Employees Retirement System of Texas acquired a new position worth $49,000 in the same quarter.
In the third quarter, Smartleaf Asset Management LLC boosted its holdings by 192.0%, owning a total of 1,171 shares valued at $35,000. NBT Bank N A NY dramatically increased its stake by 3,220.0% in the fourth quarter, now owning 1,328 shares worth about $35,000. Additionally, Optiver Holding B.V. acquired a new stake valued at $40,000 during the third quarter. Overall, institutional investors now own 71.53% of Kyndryl’s stock.
Kyndryl’s Financial Performance
Despite the recent stock decline, Kyndryl’s financial metrics show some resilience. The company reported a debt-to-equity ratio of 2.24, a current ratio of 1.02, and a quick ratio also of 1.02. Its market capitalization stands at $2.54 billion, with a price-to-earnings (P/E) ratio of 10.58 and a beta of 1.84. The company’s 50-day moving average price is $25.23, while the 200-day moving average is $28.09.
Kyndryl last announced its earnings results on February 9, 2023, reporting earnings per share of $0.52, falling short of the consensus estimate of $0.60 by $0.08. The company generated revenue of $3.86 billion for the quarter, which was slightly below the expected $3.89 billion. Despite these challenges, Kyndryl noted a net margin of 1.65% and a return on equity of 25.77%. Revenue for the quarter showed a modest year-over-year increase of 0.6%, compared to the same period last year.
Analysts forecast that Kyndryl Holdings, Inc. will post earnings per share of $0.73 for the current year, indicating cautious optimism for future performance.
Kyndryl, formed in November 2021 through the spin-off of IBM’s Managed Infrastructure Services business, designs, builds, manages, and modernizes critical IT systems for enterprises across various industries, including financial services, telecommunications, healthcare, manufacturing, and retail. With approximately 90,000 professionals operating in over 60 countries, Kyndryl remains a key player in the global managed infrastructure services sector.
