Kyndryl Holdings (KD) Stock Forecast & Price Target

Kyndryl Holdings Inc. is demonstrating strong financial performance with a significant expected increase in adjusted pretax income of 30-50% year-over-year in fiscal year 2026. The company reported a remarkable 29% year-over-year growth in Kyndryl Consult revenue, reaching $3 billion in fiscal year 2025, as it enhances customer relationships by incorporating advanced technologies such as AI, applications, and cybersecurity. Furthermore, Kyndryl has improved its profitability since the spin-off, achieving an adjusted EBITDA margin of 16.7% in fiscal year 2025, which is expected to contribute to continued margin expansion driven by a higher proportion of revenue from post-spin signings.

Kyndryl Holdings Inc. faces several downside risks, including potential revenue growth failures attributed to delays in client signings and project ramp-ups, alongside a deflationary pricing environment that threatens revenue and margin stability. The company anticipates slower revenue growth through FY26, largely due to decreased demand from clients despite a growing total addressable market in IT infrastructure services. Additionally, inflationary pressures may result in increased labor costs and challenges in retaining skilled personnel, while subdued valuation multiples further contribute to a negative financial outlook.