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It appears about 20-25% of these have already been realized. That leaves about $1.6 going forward over the next three years. The company is running about breakeven now so that indicates pretax earnings of $1.6 billion in three years.
- Based on an average daily volume of 1,650,000 shares, the days-to-cover ratio is presently 2.6 days.
- The revenue threshold for making the Fortune 500 list was $7.2 billion this year, up 13% from a year ago.
- The company claims to be the world’s largest IT infrastructure services provider.
- Management has since increased that to $520 billion.
- On average, they predict the company’s stock price to reach $16.67 in the next twelve months.
- Also, many of the new areas Kyndryl is moving to are less mission critical.
Some of these new services are discussed in catalyst #14. As shown above, the company is steadily moving away from its traditional Core Enterprise and toward growth areas such as cloud, edge, data, AI and digital workplace. Regarding advanced delivery of information to customers, Kyndryl has redeployed more than 5,500 delivery professionals to serve new revenue streams and backfill attrition. This resulted in annualized savings of $275 million versus a $200 million target, Wyshner says. By using this site, you are agreeing to security monitoring and auditing. See here for a complete list of exchanges and delays.
KD Stock News Headlines
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Dividend Strength
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Terms of Service apply. Management is not projecting any more than single digit growth once the business is transformed. I always mention concerns and weaknesses of the companies I review.
The company has been meeting or exceeding its goals so far. The other big catalyst is Kyndryl’s new opportunity to pursue a whole range of business they couldn’t before. They already have relationships with the majority of the companies those opportunities are with. They also already have a highly skilled workforce that can be retrained to move into adjacent businesses. It’s just a matter of if they can execute on it, which so far has been the case. Kyndryl is IBM’s previously managed IT infrastructure services business.
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Once the turnaround becomes apparent to the market, it should trade for at least a similar multiple to revenues or at least 50% of revenues. That would put market value at $8.6 billion which is $37.89 per share. New alliances – This is a revenue growth initiative expected to add $200 million in pretax net income per year. If you have been following Kyndryl you have seen numerous alliance announcements with many of the major IT companies.
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The Company had a fiscal 2023 (ends March 2023) objective of $200 million improvement and now expects to get to $225 million this fiscal year. The strength of revenues in the most recent quarter is described as somewhat seasonal by management. They are guiding for revenues of $4.1 billion at the midpoint for the current quarter. This number declined through September and then improved in the most recent quarter to almost breakeven. The adjustments are mostly onetime items or intangible amortization.
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Is he sharing the Three A’s strategy in his storytelling to investors? “So much so, that the joke with my investor relations team is that we’re going to dress up as the Three A’s for Halloween,” Wyshner quips. But the strategy, “I think really resonates with our shareholders because they see how the combination of them can really have a transformational impact on us as a company,” he says. Kyndryl faced an uphill battle, saddled with 40% of its contracts that were making little or no profit at the time of the spinoff. A year ago, Kyndryl executives, led by Schroeter, initiated a plan to position the company for long-term sustainable, profitable growth, Wyshner says.
They expect to get to 15% in the intermediate term. They cited this as a big growth area last quarter. Dividend initiation – Once the smoke clears and it’s apparent Kyndryl is solidly profitable, a dividend is likely. It may take a couple years as management wants to pay down some debt first and reinvest in the business. However, the balance sheet is already strong enough. Insider purchases – In the past 6 months insiders have acquired 167,800 shares at market price and have sold none other than to pay taxes on vested stock grants.
On November 9, 2022, CEO Schroeter purchased 109,000 and CFO Wyshner 20,000. Advanced delivery – This involves upskilling the workforce and automation and is a $600 million per year pretax net income opportunity. More than 4,500 professionals have been redeployed to new revenue streams and to backfill attrition.
Kyndryl’s CFO on the strategy that propelled the IBM spinoff onto the Fortune 500, boosted revenue, and saved millions
As the company works its way through legacy contracts, Wyshner is looking forward to the progress of the Three A’s over time, and “the best ways to tell that story,” he says. But getting an organization with about 90,000 employees worldwide on the same page during a transformation can have its challenges. “But we’re committed to that.” Becoming an independent company, moving off of several hundred IBM systems, and developing new ways of doing things is no small feat. “It’s been a lot of work, but I think it’s really exciting to tackle,” he says. Kyndryl Holdings landed at No. 225 on the 2023 Fortune 500 list, generating revenue of $18.3 billion in 2022. The revenue threshold for making the Fortune 500 list was $7.2 billion this year, up 13% from a year ago.
This represented 4.8% of the market cap of IBM at the time of the spinoff, for a business with 20% of the combined revenues. Kyndryl joined the S&P Midcap 400 on November 5th and there are about 227 million shares outstanding. It has about 90,000 employees, most of which are highly skilled. Adjusted EBITDA requires some explanation as it is misleading and way overstated. They include amortization of deferred costs in adjusted EBITDA.
Still, escalating expenses could narrow IBM’s margin in this area. © 2023 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided ‘as-is’ and solely for informational purposes, not for trading purposes or advice, and is delayed.
Many long term IBM holders sold for various reasons. IBM has long been a big dividend investors stock and Kyndryl currently does not pay one. Kyndryl’s market cap is 4% of IBM’s, making it too small for large cap funds and investors.
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- Some discussions contain forward looking statements which are based on current expectations and differences can be expected.
- At the earnings announcement on February 7, 2023, management raised it revenue guidance in fiscal 2023 to $16.8 to $17.0 billion from $16.3 to $16.5 billion.
He was central in digital transformation at Fortune 50 companies including Nike, Walmart, Microsoft, and Paypal. Most recently, Mehta served as the CFO of Anaplan, where he was responsible for finance, audit, legal, procurement, investor relations, accounting, and strategy. Before Anaplan, he was CFO of Nike Direct, where he provided leadership and direction across the supply chain and finance functions to drive digital transformation during the height of the pandemic.
Kyndryl Holdings Earnings Growth & KD Earnings Dates
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