Kyndryl Holdings (KD) Stock Forecast & Price Target

Kyndryl Holdings Inc. is projected to achieve a notable increase in adjusted pretax income, expected to rise by 30-50% year-over-year in F1Q26, indicating strong financial performance prospects. Additionally, Kyndryl's Consult revenue experienced a 29% year-over-year increase, reaching $3 billion in FY25, primarily driven by the expansion of customer relationships in AI, applications, and cybersecurity. Moreover, Kyndryl Consult now represents a significant portion, accounting for approximately 23-24% of total signings, reinforcing its role as a key growth driver within the company's operations.

Kyndryl Holdings Inc.'s cloud segment, which represents approximately 34% of total sales, is projected to experience low to mid-single-digit percentage annualized growth, indicating a stagnating growth trajectory in a critical area of its operations. The forecasted cumulative free cash flow of around $2.5 billion from fiscal year 2026 to 2028, while earmarked for significant share buybacks, suggests limited avenues for reinvestment into the business to drive future growth. This combination of muted revenue growth potential in the cloud segment and an emphasis on buybacks over business expansion raises concerns about the company's long-term financial health and market competitiveness.