Yahoo Finance Kyndryl Holdings, Inc. (NYSE:KD): When Will It Breakeven?
We feel now is a pretty good time to analyse Kyndryl Holdings, Inc.'s (NYSE:KD) business as it appears the company may be on the cusp of a considerable accomplishment. Kyndryl Holdings, Inc. operates as a technology services company and IT infrastructure services provider worldwide. The US$2.1b market-cap company’s loss lessened since it announced a US$2.3b loss in the full financial year, compared to the latest trailing-twelve-month loss of US$2.1b, as it approaches breakeven. Many investors are wondering about the rate at which Kyndryl Holdings will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
View our latest analysis for Kyndryl Holdings
Expectations from some of the American IT analysts is that Kyndryl Holdings is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of US$209m in 2025. So, the company is predicted to breakeven approximately 3 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 77%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for Kyndryl Holdings given that this is a high-level summary, though, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one issue worth mentioning. Kyndryl Holdings currently has a debt-to-equity ratio of 111%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Kyndryl Holdings, so if you are interested in understanding the company at a deeper level, take a look at Kyndryl Holdings' company page on Simply Wall St. We've also compiled a list of important aspects you should further research:
Historical Track Record: What has Kyndryl Holdings' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Kyndryl Holdings' board and the CEO’s background.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data 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 financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
