Kyndryl (NYSE:KD) Shares Gap Down Following Weak Earnings

Key Points

• Shares gapped down after Kyndryl reported Q results, opening at $13.18 from $14.70 after an EPS miss of $0.18 versus $0.43 expected, with the stock last trading around $13.33 on heavy volume.
• Revenue was roughly in line at $3.77 billion but fell 0.8% year-over-year and EPS dropped from $0.52 a year earlier, signaling weakening profitability.
• Analyst sentiment has turned negative: several firms downgraded the stock (Morgan Stanley cut its price target to $13), and MarketBeat shows a consensus rating of "Reduce" with an average price target of $22.79.

Kyndryl Holdings, Inc. (NYSE:KD - Get Free Report)'s share price gapped down before the market opened on Wednesday following a dissappointing earnings announcement. The stock had previously closed at $14.70, but opened at $13.18. Kyndryl shares last traded at $13.33, with a volume of 1,660,835 shares trading hands.

The company reported $0.18 EPS for the quarter, missing analysts' consensus estimates of $0.43 by ($0.25). The business had revenue of $3.77 billion during the quarter, compared to the consensus estimate of $3.75 billion. Kyndryl had a return on equity of 25.91% and a net margin of 1.65%.The business's revenue for the quarter was down .8% compared to the same quarter last year. During the same period in the prior year, the firm earned $0.52 EPS.

Wall Street Analyst Weigh In

Several analysts have issued reports on KD shares. Weiss Ratings lowered shares of Kyndryl from a "hold (c-)" rating to a "sell (d+)" rating in a research report on Wednesday, March 18th. Morgan Stanley dropped their price target on shares of Kyndryl from $28.00 to $13.00 and set an "equal weight" rating on the stock in a research report on Tuesday, March 24th. Zacks Research lowered shares of Kyndryl from a "hold" rating to a "strong sell" rating in a research report on Wednesday, February 18th. BMO Capital Markets started coverage on shares of Kyndryl in a research report on Monday, April 20th. They set a "market perform" rating and a $15.00 price target on the stock. Finally, Guggenheim lowered shares of Kyndryl from a "buy" rating to a "neutral" rating in a research report on Tuesday, February 10th. One research analyst has rated the stock with a Buy rating, five have given a Hold rating and three have issued a Sell rating to the company. According to MarketBeat.com, the stock currently has a consensus rating of "Reduce" and an average price target of $22.79.

Institutional Trading of Kyndryl

Several institutional investors and hedge funds have recently added to or reduced their stakes in the company. Public Employees Retirement System of Ohio raised its position in Kyndryl by 0.5% during the third quarter. Public Employees Retirement System of Ohio now owns 77,612 shares of the company's stock worth $2,331,000 after acquiring an additional 421 shares in the last quarter. Northwestern Mutual Wealth Management Co. increased its holdings in shares of Kyndryl by 17.1% in the third quarter. Northwestern Mutual Wealth Management Co. now owns 3,064 shares of the company's stock valued at $92,000 after purchasing an additional 448 shares during the last quarter. Crossmark Global Holdings Inc. increased its holdings in shares of Kyndryl by 3.4% in the third quarter. Crossmark Global Holdings Inc. now owns 14,625 shares of the company's stock valued at $439,000 after purchasing an additional 487 shares during the last quarter. Hantz Financial Services Inc. increased its holdings in shares of Kyndryl by 33.7% in the third quarter. Hantz Financial Services Inc. now owns 1,962 shares of the company's stock valued at $59,000 after purchasing an additional 495 shares during the last quarter. Finally, Geneos Wealth Management Inc. increased its holdings in shares of Kyndryl by 62.2% in the second quarter. Geneos Wealth Management Inc. now owns 1,487 shares of the company's stock valued at $62,000 after purchasing an additional 570 shares during the last quarter. 71.53% of the stock is owned by institutional investors.

Kyndryl Stock Performance

The stock has a market capitalization of $2.94 billion, a price-to-earnings ratio of 12.44 and a beta of 1.72. The company's fifty day simple moving average is $13.02 and its 200 day simple moving average is $20.53. The company has a quick ratio of 0.86, a current ratio of 0.86 and a debt-to-equity ratio of 1.75.

Kyndryl Company Profile

Kyndryl NYSE: KD is a global managed infrastructure services provider formed in November 2021 through the spin-off of IBM's Managed Infrastructure Services business. The company designs, builds, manages and modernizes critical information technology systems for enterprises worldwide. Kyndryl's core offerings include cloud migration and management, network and edge computing solutions, digital workplace services and IT resiliency and security capabilities.

With a workforce of approximately 90,000 professionals and operations in more than 60 countries, Kyndryl serves clients across a broad range of industries, including financial services, telecommunications, healthcare, manufacturing and retail.

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