By Nate Wolf

If there is one thing investors hate most, it is uncertainty. And Kyndryl Holdings' future now looks as uncertain as ever after a historic stock selloff on Monday, analysts say.

Kyndryl stock plummeted 55% to $10.59 on Monday after the IT infrastructure company announced the departures of Chief Financial Officer David Wyshner, General Counsel Edward Sebold, and Global Controller Vineet Khurana from their posts. Khurana stepped down to serve as a senior vice president of business operations, the company said.

Kyndryl also said it was reviewing its accounting practices after receiving voluntary document requests from the Securities and Exchange Commission.

Guggenheim Partners downgraded Kyndryl stock to Neutral from Buy and withdrew its price target in a research note. The announcements, not to mention weak fiscal third-quarter results, "draw more questions than answers," wrote analyst Jonathan Lee.

The stock recovered Tuesday, rising 5% to $11.12, so at least some investors were buying the dip. Shares remain down 58% on the year and 73% over the last 12 months.

Investors likely expected a weak earnings print from the IBM spinoff, Lee said, but they weren't prepared for the exit of Kyndryl's top legal and financial brass or the company's disclosure of material weaknesses in internal controls over financial reporting. That SEC review, in particular, is likely to create an overhang for the stock moving forward.

Kyndryl indicated that it was developing a remediation plan, but didn't provide details, saying more information would come in a now-delayed quarterly securities filing.

"We expect investors to continue questioning execution and credibility until management provides an update on material weaknesses," Lee wrote.

Kyndryl's financial results and guidance don't inspire much confidence either. The company now expects revenue to decline 2% to 3% in fiscal 2026, down from a previous estimate of 1% growth. It also slashed its forecast for free cash flow to $350 million at the midpoint, from $550 million previously.

The new guidance throws into question Kyndryl's 2028 target of $1 billion in adjusted free cash flow, Lee said. If investors are to believe in that kind of medium-term target once again, they will need to see a credible management team capable of driving a turnaround.

For now, analysts suggest moving to the sidelines. On Monday, J.P. Morgan double-downgraded Kyndryl to Underweight from Overweight and Oppenheimer cut its rating on the stock to Perform from Outperform.

Write to Nate Wolf at nate.wolf@barrons.com

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February 11, 2026 09:20 ET (14:20 GMT)

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