Reassessing Kyndryl (KD) After A 70% Share Price Slide Since Last Year

Simply Wall St.02-14

If you are wondering whether Kyndryl Holdings is starting to look mispriced after a rough run in the market, this article will walk you through what the current share price might be implying about its...

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The stock has seen sharp moves recently, with a 47.9% decline over the last 7 days, a 55.5% decline over 30 days, and a 70.7% decline over the past year, which may have changed how investors view both its potential and its risks. This sell off comes as Kyndryl continues to be covered in the news as an independent IT infrastructure services company following its separation from IBM. There has been attention on how it positions itself against larger and smaller peers in a crowded outsourcing market. Commentary has also focused on how its legacy contract base and large enterprise customer relationships could influence future contract wins and pricing power. Against this backdrop, Kyndryl currently scores 5 out of 6 on our valuation checks, as shown in its valuation score. Next, we will look at what different valuation methods are saying about the stock today, before finishing with a framework that can help you interpret these numbers more effectively.  Find out why Kyndryl Holdings's -70.7% return over the last year is lagging behind its peers. AdvertisementApproach 1: Kyndryl Holdings Discounted Cash Flow (DCF) Analysis A Discounted Cash Flow model estimates what a company might be worth by projecting its future cash flows and then discounting those back to today’s value. For Kyndryl Holdings, the model used here is a 2 Stage Free Cash Flow to Equity approach based on cash flow projections. Kyndryl’s latest twelve month free cash flow stands at about $414.9 million. Analysts provide explicit forecasts for some of the early years, and Simply Wall St then extrapolates further out. In this model, projected free cash flow reaches $1.0b in 2035, with annual figures such as $357 million in 2026, $388 million in 2027 and $606 million in 2028, all in $ terms and then discounted back to today. Putting those projections together, the DCF model arrives at an estimated intrinsic value of $32.30 per share. Based on this, Kyndryl is assessed as 62.1% undervalued relative to its current share price, which implies a large valuation gap if the cash flow assumptions hold. Result: UNDERVALUED Our Discounted Cash Flow (DCF) analysis suggests Kyndryl Holdings is undervalued by 62.1%. Track this in your watchlist or portfolio, or discover 53 more high quality undervalued stocks. KD Discounted Cash Flow as at Feb 2026 Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Kyndryl Holdings. Approach 2: Kyndryl Holdings Price vs Earnings For profitable companies, the P/E ratio is a straightforward way to think about what you are paying for each dollar of current earnings. It is popular because it links the share price directly to the company’s bottom line, which is usually less volatile than revenue or book value. What counts as a “normal” or “fair” P/E depends on how the market views a company’s growth prospects and risk. Higher expected growth or lower perceived risk can support a higher P/E, while lower growth expectations or higher risk tend to go with a lower P/E. Kyndryl Holdings currently trades on a P/E of 11.19x. That sits below both its peer average of 14.69x and the broader IT industry average of 23.23x. Simply Wall St also calculates a Fair Ratio of 48.30x for Kyndryl, which is the P/E level its model suggests based on factors such as earnings growth, industry, profit margin, market cap and specific risks. This Fair Ratio is designed to be more tailored than simple peer or industry comparisons because it blends these company specific inputs into a single benchmark. Comparing Kyndryl’s actual P/E of 11.19x with the Fair Ratio of 48.30x points to the shares trading at a sizable discount on this metric. Result: UNDERVALUED NYSE:KD P/E Ratio as at Feb 2026 P/E ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 23 top founder-led companies. Upgrade Your Decision Making: Choose Your Kyndryl Holdings Narrative Earlier we mentioned that there is an even better way to understand valuation, so let us introduce Narratives. This simply means writing down the story you believe about Kyndryl Holdings and linking that story to explicit forecasts for revenue, earnings, margins and a fair value estimate. On Simply Wall St, Narratives live in the Community page and give you an easy way to connect three pieces: what you think is happening in the business, what that implies for future financials, and what you see as a fair value to compare with today’s share price when deciding whether you are closer to buying, holding or selling. Narratives update automatically when new information such as news, earnings or valuation inputs are added. This means your fair value view stays aligned with the latest assumptions rather than a one off calculation. For Kyndryl, one Narrative on the optimistic side might anchor around a fair value near US$55.00. Another more cautious Narrative might focus on a fair value closer to US$25.33. Seeing those side by side helps you decide which story and set of numbers feels closer to your own view. Do you think there's more to the story for Kyndryl Holdings? Head over to our Community to see what others are saying! NYSE:KD 1-Year Stock Price Chart  This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.Valuation is complex, but we're here to simplify it.Discover if Kyndryl Holdings might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.Access Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. 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