Should you buy Kyndryl Holdings (USA Stocks:KD) based on latest technical indicators?
 | By Rifka Kats | Macroaxis Story |
Kyndryl Holdings (KD) stock has surged over 2% despite a modest market downturn, showcasing its resilience. The IT Services company, listed on the NYSE, has been witnessing a steady increase in its shares short, from 3.7M in the prior month to the current 4.7M. This indicates a growing bearish sentiment among investors, which is reflected in the company's short ratio of 1.94. Despite the challenges, Kyndryl's valuation real value stands at $15.1, significantly higher than its valuation market value of $13.17. However, the company's financials paint a concerning picture. It reported a net income loss of $1.4B and an operating income loss of $850M. Additionally, the company's net interest income was also in the red, with a loss of $94M. The 52-week range for the stock has been between $7.93 and $17.21, with the 50-day and 200-day moving averages at $13.176 and $12.4406, respectively. Analysts have a mixed outlook on the stock, with one strong buy recommendation, three holds, and an overall consensus of 'Hold'. The estimated target price ranges from $14 to $22, with a Wall Street target price of $16.33. Given the current market conditions and the company's financial performance, investors should tread cautiously. As of the last update on 2023-07-08, the naive expected forecast value for Kyndryl Holdings is $12.29, with a possible upside price of $15.08 and a possible downside price of $9.5. While some millennials may be indifferent towards the IT services sector, it's sensible to evaluate Kyndryl Holdings in terms of its current potential. As anticipated, Kyndryl Holdings is beginning to demonstrate its true potential as shareholders grow increasingly confident in the company's future outlook. The returns on the market and those on Kyndryl Holdings have shown a slight correlation over the past few months. The presence of robust fundamental indicators for the company suggests a short-term price swing for Kyndryl's shareholders. Kyndryl Holdings is set to announce its earnings tomorrow.
Macroaxis uses a strict editorial review process to publish 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 Raphi Shpitalnik
Kyndryl Holdings (KD) has shown resilience in the face of a modest market downturn, with its stock price climbing over 2%. The stock's 50-day moving average stands at $13.18, just slightly above its last price of $13.17, indicating a stable performance. Despite the company's operating income showing a loss of $850 million, the Wall Street target price for the stock is $16.33, suggesting potential upside. However, investors should be aware of the company's high variance of 7.51 and standard deviation of 2.74, which indicate a higher level of risk. Lastly, the company's negative net income of $1.4 billion underlines the financial challenges Kyndryl Holdings currently faces.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Kyndryl Holdings. Your research has to be compared to or analyzed against Kyndryl Holdings' peers to derive any actionable benefits. When done correctly, Kyndryl Holdings' competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in Kyndryl Holdings.
Rigorous look
Kyndryl Holdings has an average rating of 'Hold' from four analysts. This consensus is often based on technical analyses, which typically utilize price momentum, patterns, and trends derived from historical prices. The goal of such analysis is to identify signals based on market sentiment towards Kyndryl Holdings, reflecting investors' perception of the company's future value. Let's delve into some aspects of Kyndryl's technical analysis. The company has a Net Profit Margin (PM) of -0.08%, which suggests that it may not be effectively executing its pricing strategies. This figure is significantly below average. Furthermore, it has a Net Operating Margin (NOM) of -0.03%, indicating that for every $100 of sales, it incurs a net operating loss of $0.03.
Using predictive technical analysis, we can analyze different prices and returns patterns and diagnose historical swings to determine the real value of Kyndryl Holdings. In general, sophisticated investors focus on analyzing Kyndryl Holdings stock price patterns and their correlations with different microeconomic environment and drivers. They apply predictive analytics to build Kyndryl Holdings's daily price indicators and compare them against related drivers such as momentum indicators and various other types of predictive indicators. Using this methodology combined with a more conventional technical analysis and fundamental analysis, we attempt to find the most accurate representation of Kyndryl Holdings's intrinsic value. In addition to deriving basic predictive indicators for Kyndryl Holdings, many experienced traders also check how macroeconomic factors affect Kyndryl Holdings price patterns. Please read more on our technical analysis page or use our predictive modules below to complement your research.
Sophisticated investors, who have witnessed many market ups and downs, anticipate that the market will even out over time. This tendency of Kyndryl Holdings' price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
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. Financial leverage can amplify the potential profits to Kyndryl Holdings' owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Kyndryl Holdings' financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Kyndryl Holdings's total debt and its cash.
Kyndryl Holdings Gross Profit
Kyndryl Holdings Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Kyndryl Holdings previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Kyndryl Holdings Gross Profit growth over the last 10 years. Please check Kyndryl Holdings' gross profit and other fundamental indicators for more details.
Is Kyndryl Holdings valued correctly by the market?
Kyndryl Holdings has a beta of 0.4923. Let's try to break down what Kyndryl's beta means in this case. The returns on MARKET and Kyndryl Holdings are completely uncorrelated. The beta indicator helps investors understand whether Kyndryl Holdings moves in the same direction as the rest of the market, and how volatile (i.e., risky) it is compared to the market (i.e., selected benchmark). In other words, if Kyndryl deviates very little from the market, it does not add much risk to the portfolio, but it also doesn't increase the expected returns. Kyndryl Holdings price dip over the last few months may raise some interest from shareholders. The stock closed today at a share price of 13.17 on very low momentum in trading volume. The company directors and management were not very successful in positioning the firm resources to exploit market volatility in June. However, diversifying your holdings with Kyndryl Holdings or similar stocks can still protect your portfolio during high-volatility market scenarios. The stock standard deviation of daily returns for 90 days investing horizon is currently 2.79. The current volatility is consistent with the ongoing market swings in June 2023 as well as with Kyndryl Holdings unsystematic, company-specific events. Despite a modest market downturn, Kyndryl Holdings (KD) saw its stock climb over 2% recently.This is an impressive feat given the company's financial technicals. Kyndryl has been dealing with a significant net income loss of $1.4 billion, and an operating income loss of $850 million. Despite these losses, the company has managed to maintain a gross profit of $2.09 billion and EBITDA of $617 million. Kyndryl's 200-day moving average stands at 12.44, with a 52-week high and low of 17.21 and 7.93 respectively. The company's shares are primarily owned by institutions, with a 69.55% stake, while insiders hold a minor 0.68%. The short percent of 0.0232 indicates a relatively low level of short interest, with 4.7 million shares short. The company's current ratio is 1.20X, suggesting it can cover its short-term liabilities. However, the company's standard deviation of 2.74 and negative information ratio of -0.05 indicate a high level of risk. Despite these challenges, Kyndryl has a Wall Street target price of $16.33, indicating potential upside. The company's total debt is relatively low at $110 million, against a total asset value of $11.46 billion. This suggests that Kyndryl, despite its financial difficulties, may still present a viable investment opportunity. .
Building efficient market-beating portfolios requires time, education, and a lot of computing power!
The Portfolio Architect is an AI-driven system that provides multiple benefits to our users by leveraging cutting-edge machine learning algorithms, statistical analysis, and predictive modeling to automate the process of asset selection and portfolio construction, saving time and reducing human error for individual and institutional investors.
Try AI Portfolio ArchitectEditorial Staff
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 Rifka Kats do not own shares of Kyndryl Holdings. Please refer to our Terms of Use for any information regarding our disclosure principles.