Legacy contracts weigh on Kyndryl

Article Excerpt

KYNDRYL HOLDINGS INC. $24 is still a hold. The company (New York symbol KD; Conservative Growth, Manufacturing & Industry sector; Shares outstanding: 230.5 million; Market cap: $5.5 billion; Price-to-sales ratio: 0.4; No dividend paid; TSINetwork Rating: Average; www.kyndryl.com) helps corporate and government clients manage their datacentres. On November 3, 2021, former parent company International Business Machines Corp. (New York symbol IBM) spun off Kyndryl as a separate firm. Investors received one Kyndryl share for every five IBM shares they held. In its fiscal 2025 first quarter, ended June 30, 2024, Kyndryl’s revenue fell 10.8%, to $3.74 billion from $4.19 billion a year earlier. That’s mainly due to the low-margin contracts it inherited from IBM. Excluding unusual items, it earned $31 million, or $0.13 a share. That’s a big improvement over nil in the year-earlier quarter. Kyndryl is a hold. hold…