Kyndryl Holdings, Inc. (NYSE:KD) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Kyndryl Holdings, Inc. operates as a technology services company and IT infrastructure services provider worldwide. The US$5.6b market-cap company posted a loss in its most recent financial year of US$340m and a latest trailing-twelve-month loss of US$188m shrinking the gap between loss and breakeven. As path to profitability is the topic on Kyndryl Holdings' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for Kyndryl Holdings

Consensus from 4 of the American IT analysts is that Kyndryl Holdings is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$144m in 2025. The company is therefore projected to breakeven around 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 85%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Kyndryl Holdings' growth isn’t the focus of this broad overview, though, take into account that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one issue worth mentioning. Kyndryl Holdings currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of Kyndryl Holdings to cover in one brief article, but the key fundamentals for the company can all be found in one place – Kyndryl Holdings' company page on Simply Wall St. We've also compiled a list of important factors you should further examine:

1. Valuation: What is Kyndryl Holdings worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Kyndryl Holdings is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Kyndryl Holdings’s board and the CEO’s background.
3. 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.