Should I hold on to my Kyndryl (USA Stocks:KD) position?

KD Stock

USD 14.09 0.07 0.49%

Macroaxis Story

The stock experiences above-average trading activities. Kyndryl Holdings Book Value per Share is projected to decrease significantly based on the last few years of reporting. The past year's Book Value per Share was at 11.10. The current year Sales per Share is expected to grow to 75.94, whereas Earnings before Tax are forecasted to decline to (1.9 B). While some of us are becoming more enthusiastic about technology space, let's digest Kyndryl Holdings in greater detail to make a better estimate of its debt utilization. I will address a few possible reasons shareholders do not currently respect this stock.

Published over a month ago

View all stories for Kyndryl Holdings | View All Stories

Macroaxis uses a strict editorial review process to publish our stories and blog posts. Our publishers support our company and may receive a small commission when the partner links or references are utilized. Commissions do not affect the opinions or evaluations of our editorial team. The information our editors and media partners deliver is confidential and licensed for your sole use as a Macroaxis user. We reserve all rights to the content of this article, and therefore copying or distributing this story in whole or in part is strictly prohibited.

Reviewed by Rifka Kats

The company reports 3.13 B of total liabilities with total debt to equity ratio (D/E) of 1.98, which is normal for its line of buisiness. Kyndryl Holdings has a current ratio of 1.18, indicating that it may not be capable to disburse its debt commitments in time. Debt can assist Kyndryl Holdings until it has trouble settling it off, either with new capital or with free cash flow. So, Kyndryl Holdings' shareholders could walk away with nothing if the company can't fulfill its legal obligations to repay debt. However, a more frequent occurrence is when companies like Kyndryl Holdings sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Kyndryl to invest in growth at high rates of return. When we think about Kyndryl Holdings' use of debt, we should always consider it together with cash and equity.

Should I hold on to my Kyndryl (USA Stocks:KD) position?

Kyndryl Holdings financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Kyndryl Holdings, including all of Kyndryl Holdings's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Kyndryl Holdings assets, the company is considered highly leveraged. Understanding the composition and structure of overall Kyndryl Holdings debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it.

Please read more on our technical analysis page.

Understanding Kyndryl Total Liabilities

Kyndryl Holdings liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Kyndryl Holdings has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Kyndryl Holdings balance sheet include debt obligations and money owed to different Kyndryl Holdings vendors, workers, and loan providers. Below is the chart of Kyndryl short long-term liabilities accounts currently reported on its balance sheet.

You can use Kyndryl Holdings financial leverage analysis tool to get a better grip on understanding its financial position

How important is Kyndryl Holdings's Liquidity

Kyndryl Holdings financial leverage refers to using borrowed capital as a funding source to finance Kyndryl Holdings ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Kyndryl Holdings financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Kyndryl Holdings's total debt and its cash.

Is Kyndryl Holdings valued correctly by the market?

The latest price surge of Kyndryl Holdings may raise some interest from shareholders. The stock closed today at a share price of 16.31 on 2,624,227 in trading volume. The company executives may have good odds in positioning the firm resources to exploit market volatility in March. The stock standard deviation of daily returns for 90 days investing horizon is currently 3.88. The above-average risk is mostly attributed to market volatility and speculations regarding some of the upcoming earning calls from Kyndryl Holdings partners.

Liabilities Breakdown

5 B

Current Liabilities

5.7 B

Long-Term Liabilities

	Total Liabilities	10.67 Billion
	Current Liabilities	4.97 Billion
	Long-Term Liabilities	5.7 Billion
	Tax Liabilities	319.42 Million

Are Kyndryl Holdings technical ratios showing a throwback?

The variance is down to 17.84 as of today. Kyndryl Holdings currently demonstrates below-average downside deviation. It has Information Ratio of 0.22 and Jensen Alpha of 0.87. However, we advise investors to further question Kyndryl Holdings expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Kyndryl Holdings' stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Kyndryl Holdings' stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Although some other entities under the information technology services industry are still a bit expensive, Kyndryl Holdings may offer a potential longer-term growth to shareholders. With an optimistic outlook on your 90 days horizon, it may be a good time to take over new shares of Kyndryl or increase your existing holdings in the Stock as it seems the potential growth has not yet been fully factored into the current price. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Kyndryl Holdings.

Editorial Staff

Aina Ster is a Member of Macroaxis Editorial Board. Aina delivers weekly perspective on ongoing market and economic trends, analysis and tips from predictive analysis to forecasting across various financial instruments. View Profile

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Aina Ster do not own shares of Kyndryl Holdings. Please refer to our Terms of Use for any information regarding our disclosure principles.

Would you like to provide feedback on the content of this article?

You can get in touch with us directly or send us a quick note via email to editors@macroaxis.com

Macroaxis helps investors of all levels and skills to maximize the upside of all their holdings and minimize the risk associated with market volatility, economic swings, and company-specific events. View terms and conditions

Feedback Blog

Made with optimal in San Francisco

2023 Macroaxis LLC