Kyndryl Faces Securities Class Action Lawsuit
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Should l Buy KD?
Source: PRnewswire
- Stock Price Plunge: Kyndryl's shares fell by $12.90, or 55%, on February 9, 2026, after the company announced it would not timely file its quarterly report, resulting in a loss of over $3 billion in market capitalization in a single day, indicating severe market concerns over financial transparency.
- Internal Control Weaknesses: The company disclosed significant weaknesses in its internal controls, including issues with 'tone at the top' and executive departures, raising doubts about the effectiveness of its financial reporting and potentially leading to a further decline in investor confidence.
- SEC Document Requests: Kyndryl received document requests from the SEC related to matters under review by its Audit Committee, which could trigger broader regulatory scrutiny and further impact the company's reputation and shareholder interests.
- Investor Rights Advocacy: Hagens Berman is investigating whether Kyndryl intentionally misled investors, urging those who suffered significant losses to come forward, reflecting a strong focus on corporate governance and transparency issues.
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Analyst Views on KD
Wall Street analysts forecast KD stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for KD is 33.25 USD with a low forecast of 28.00 USD and a high forecast of 40.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
4 Analyst Rating
3 Buy
1 Hold
0 Sell
Strong Buy
Current: 11.120
Low
28.00
Averages
33.25
High
40.00
Current: 11.120
Low
28.00
Averages
33.25
High
40.00
About KD
Kyndryl Holdings, Inc. is a provider of mission-critical enterprise technology services offering advisory, implementation and managed service capabilities to customers in more than 60 countries. The Company designs, builds, manages and modernizes complex information systems around the world. Its segments include United States, Japan, Principal Markets and Strategic Markets. It offers services across domains, such as cloud services, core enterprise and zCloud services, applications, data and artificial intelligence (AI) services, digital workplace services, security and resiliency services and network and edge services. Its advisory and implementation services are branded as Kyndryl Consult. It provides end-to-end enterprise data services, including data transformation, data architecture and management, data governance and compliance and data migration. It provides comprehensive enterprise cybersecurity services for chief information security officers (CISOs) and chief risk officers.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Kyndryl's Earnings Miss Expectations, Stock Declines
- Earnings Performance: Kyndryl reported adjusted earnings per share of 52 cents, missing the analyst consensus of 60 cents, with quarterly revenues of $3.86 billion slightly below the expected $3.89 billion, indicating significant financial pressure on the company.
- Executive Departure Impact: The departure of the CFO has raised investor concerns, leading JP Morgan to downgrade the stock from Overweight to Underweight and significantly cut its price target to $16, reflecting a pessimistic outlook on the company's future performance.
- Revenue Outlook Downgrade: Kyndryl expects fiscal 2026 adjusted pretax income to be between $575 million and $600 million, down from a previous forecast of $725 million, indicating challenges in the current economic environment that may affect future investor confidence.
- Technical Analysis Shows Weakness: Kyndryl's stock is currently trading 55.3% below its 20-day simple moving average and 60.4% below its 100-day simple moving average, indicating significant weakness in the short term, with shares down 74.18% over the past 12 months.
See More
Kyndryl Faces Securities Class Action Lawsuit
- Stock Price Plunge: Kyndryl's shares fell by $12.90, or 55%, on February 9, 2026, after the company announced it would not timely file its quarterly report, resulting in a loss of over $3 billion in market capitalization in a single day, indicating severe market concerns over financial transparency.
- Internal Control Weaknesses: The company disclosed significant weaknesses in its internal controls, including issues with 'tone at the top' and executive departures, raising doubts about the effectiveness of its financial reporting and potentially leading to a further decline in investor confidence.
- SEC Document Requests: Kyndryl received document requests from the SEC related to matters under review by its Audit Committee, which could trigger broader regulatory scrutiny and further impact the company's reputation and shareholder interests.
- Investor Rights Advocacy: Hagens Berman is investigating whether Kyndryl intentionally misled investors, urging those who suffered significant losses to come forward, reflecting a strong focus on corporate governance and transparency issues.
See More
Kyndryl Faces Securities Fraud Class Action Lawsuit
- Lawsuit Background: Kyndryl Holdings, Inc. is facing allegations of significant misstatements in financial reports from August 7, 2024, to February 9, 2026, which has resulted in investor losses, highlighting serious issues in corporate governance and financial transparency.
- Legal Proceedings: The lawsuit has been filed in the U.S. District Court for the Eastern District of New York under case number 1:26-cv-00782, with investors required to apply for lead plaintiff status by April 13, 2026, indicating the urgency of the legal process and potential investor rights.
- Internal Control Failures: The complaint alleges that Kyndryl lacked adequate internal controls and failed to timely file its quarterly report with the SEC for the quarter ending December 31, 2025, which not only affects compliance but may also lead to a further decline in investor confidence.
- Investor Action Recommendations: Kessler Topaz Meltzer & Check, LLP encourages Kyndryl investors to reach out for more information, indicating that investors should actively seek legal support to protect their interests in such lawsuits.
See More
Kyndryl Executives Depart Amid SEC Investigation
- Executive Departures: Kyndryl announced the immediate departure of its CFO and General Counsel, indicating potential internal management issues that significantly undermine investor confidence in the company's future.
- Cash Management Review: The company is reviewing its cash management practices and related disclosures, raising concerns about the effectiveness of its internal controls, which could impact the transparency and accuracy of future financial reporting.
- Stock Price Plunge: Following the announcement, Kyndryl's stock price plummeted from $23.49 on February 6 to $10.59 on February 9, a staggering 55% drop that reflects severe market concerns regarding the company's governance and financial health.
- SEC Investigation: Kyndryl has received voluntary document requests from the SEC, indicating potential risks of violating federal securities laws, which further exacerbates investor anxiety and uncertainty surrounding the company's operations.
See More
Kyndryl Under Internal Accounting Investigation
- Cash Management Review: Kyndryl Holdings announced on February 9, 2026, that it is reviewing its cash management procedures as part of an internal accounting investigation, which could significantly impact financial reporting accuracy, prompting investors to scrutinize cash flow disclosures.
- Reporting Changes: CFO David Wyshner indicated during the August 2025 earnings call that Kyndryl would shift focus from adjusted free cash flow to reported free cash flow, suggesting enhanced financial maturity; however, the ongoing investigation raises concerns about the reliability of these reports.
- Internal Control Deficiencies: The company expects to report 'material weaknesses' in its internal controls, and if the investigation reveals prior cash flow figures were misstated, it could profoundly affect investors' capital allocation strategies, particularly regarding the $400 million share repurchase program.
- Legal Options Notification: Levi & Korsinsky, LLP is offering legal consultation for investors who held KD shares and incurred losses, indicating an escalation in the company's legal risks and the potential for shareholder claims.
See More
Kyndryl Holdings Under Internal Accounting Investigation
- Internal Audit Investigation: Kyndryl Holdings announced on February 9, 2026, that it is reviewing its cash management procedures as part of an internal accounting investigation, which raises concerns about the integrity of its financial reporting and could undermine investor confidence.
- Cash Flow Disclosure Issues: The adjustments to 'free cash flow' that the company highlighted in its Q1 FY2026 earnings report were deemed immaterial, but the investigation may reveal that these adjustments were, in fact, material, impacting the company's capital allocation strategy.
- Financial Health Scrutiny: CFO David Wyshner reported $22 million in free cash flow and a cash balance of $1.3 billion during the November 2025 earnings call, with a net leverage ratio below 1x; however, these figures are now under review, potentially affecting investor decisions.
- Shareholder Risks: Should the investigation determine that prior cash flow figures were misstated, Kyndryl's shareholders may face legal risks, particularly given the company's $400 million increase to its share repurchase program, all based on potentially unreliable data.
See More
Kyndryl's Earnings Miss Expectations, Stock Declines
- Earnings Performance: Kyndryl reported adjusted earnings per share of 52 cents, missing the analyst consensus of 60 cents, with quarterly revenues of $3.86 billion slightly below the expected $3.89 billion, indicating significant financial pressure on the company.
- Executive Departure Impact: The departure of the CFO has raised investor concerns, leading JP Morgan to downgrade the stock from Overweight to Underweight and significantly cut its price target to $16, reflecting a pessimistic outlook on the company's future performance.
- Revenue Outlook Downgrade: Kyndryl expects fiscal 2026 adjusted pretax income to be between $575 million and $600 million, down from a previous forecast of $725 million, indicating challenges in the current economic environment that may affect future investor confidence.
- Technical Analysis Shows Weakness: Kyndryl's stock is currently trading 55.3% below its 20-day simple moving average and 60.4% below its 100-day simple moving average, indicating significant weakness in the short term, with shares down 74.18% over the past 12 months.
See More
Kyndryl Faces Securities Class Action Lawsuit
- Stock Price Plunge: Kyndryl's shares fell by $12.90, or 55%, on February 9, 2026, after the company announced it would not timely file its quarterly report, resulting in a loss of over $3 billion in market capitalization in a single day, indicating severe market concerns over financial transparency.
- Internal Control Weaknesses: The company disclosed significant weaknesses in its internal controls, including issues with 'tone at the top' and executive departures, raising doubts about the effectiveness of its financial reporting and potentially leading to a further decline in investor confidence.
- SEC Document Requests: Kyndryl received document requests from the SEC related to matters under review by its Audit Committee, which could trigger broader regulatory scrutiny and further impact the company's reputation and shareholder interests.
- Investor Rights Advocacy: Hagens Berman is investigating whether Kyndryl intentionally misled investors, urging those who suffered significant losses to come forward, reflecting a strong focus on corporate governance and transparency issues.
See More
Kyndryl Faces Securities Fraud Class Action Lawsuit
- Lawsuit Background: Kyndryl Holdings, Inc. is facing allegations of significant misstatements in financial reports from August 7, 2024, to February 9, 2026, which has resulted in investor losses, highlighting serious issues in corporate governance and financial transparency.
- Legal Proceedings: The lawsuit has been filed in the U.S. District Court for the Eastern District of New York under case number 1:26-cv-00782, with investors required to apply for lead plaintiff status by April 13, 2026, indicating the urgency of the legal process and potential investor rights.
- Internal Control Failures: The complaint alleges that Kyndryl lacked adequate internal controls and failed to timely file its quarterly report with the SEC for the quarter ending December 31, 2025, which not only affects compliance but may also lead to a further decline in investor confidence.
- Investor Action Recommendations: Kessler Topaz Meltzer & Check, LLP encourages Kyndryl investors to reach out for more information, indicating that investors should actively seek legal support to protect their interests in such lawsuits.
See More
Kyndryl Executives Depart Amid SEC Investigation
- Executive Departures: Kyndryl announced the immediate departure of its CFO and General Counsel, indicating potential internal management issues that significantly undermine investor confidence in the company's future.
- Cash Management Review: The company is reviewing its cash management practices and related disclosures, raising concerns about the effectiveness of its internal controls, which could impact the transparency and accuracy of future financial reporting.
- Stock Price Plunge: Following the announcement, Kyndryl's stock price plummeted from $23.49 on February 6 to $10.59 on February 9, a staggering 55% drop that reflects severe market concerns regarding the company's governance and financial health.
- SEC Investigation: Kyndryl has received voluntary document requests from the SEC, indicating potential risks of violating federal securities laws, which further exacerbates investor anxiety and uncertainty surrounding the company's operations.
See More
Kyndryl Under Internal Accounting Investigation
- Cash Management Review: Kyndryl Holdings announced on February 9, 2026, that it is reviewing its cash management procedures as part of an internal accounting investigation, which could significantly impact financial reporting accuracy, prompting investors to scrutinize cash flow disclosures.
- Reporting Changes: CFO David Wyshner indicated during the August 2025 earnings call that Kyndryl would shift focus from adjusted free cash flow to reported free cash flow, suggesting enhanced financial maturity; however, the ongoing investigation raises concerns about the reliability of these reports.
- Internal Control Deficiencies: The company expects to report 'material weaknesses' in its internal controls, and if the investigation reveals prior cash flow figures were misstated, it could profoundly affect investors' capital allocation strategies, particularly regarding the $400 million share repurchase program.
- Legal Options Notification: Levi & Korsinsky, LLP is offering legal consultation for investors who held KD shares and incurred losses, indicating an escalation in the company's legal risks and the potential for shareholder claims.
See More
Kyndryl Holdings Under Internal Accounting Investigation
- Internal Audit Investigation: Kyndryl Holdings announced on February 9, 2026, that it is reviewing its cash management procedures as part of an internal accounting investigation, which raises concerns about the integrity of its financial reporting and could undermine investor confidence.
- Cash Flow Disclosure Issues: The adjustments to 'free cash flow' that the company highlighted in its Q1 FY2026 earnings report were deemed immaterial, but the investigation may reveal that these adjustments were, in fact, material, impacting the company's capital allocation strategy.
- Financial Health Scrutiny: CFO David Wyshner reported $22 million in free cash flow and a cash balance of $1.3 billion during the November 2025 earnings call, with a net leverage ratio below 1x; however, these figures are now under review, potentially affecting investor decisions.
- Shareholder Risks: Should the investigation determine that prior cash flow figures were misstated, Kyndryl's shareholders may face legal risks, particularly given the company's $400 million increase to its share repurchase program, all based on potentially unreliable data.
See More
