Kyndryl Holdings enters July with a striking divergence: short interest has climbed steadily for a month, yet options traders just flipped sharply more defensive — all while the stock crawls back from its worst monthly stretch since early 2026.
The clearest signal this week is in options. The put/call ratio jumped to 1.00 on Monday — more than three standard deviations above its 20-day average of 0.86. That is the most defensive options posture on this name in months, close to the upper range of the 52-week window. The move is sudden: the PCR had sat in a narrow 0.83–0.92 band for the entire prior month, then broke sharply higher on the final day of June. That kind of one-session spike points to deliberate hedging demand, not routine positioning.
Short interest reinforces the caution. Bears have been quietly adding since early June — SI has climbed 19% over the past month and now accounts for 12.2% of the free float, up from roughly 10.2% at the start of May. The week-on-week rise of 7% is the steepest single-week build in the past 30 days. Despite that, borrowing costs remain extremely low at 0.42% — near the cheapest level of the recent range. Availability is actually generous at 451%, well above the 52-week low of 390%, meaning new shorts face no friction entering the trade. The borrow market here is not stressed; it is simply being used more actively. Positioning looks directional rather than squeezed.
The Street is uniformly cautious. Every analyst with a live rating on KD carries a hold-equivalent. Susquehanna downgraded to Neutral in late May, cutting the target from $16 to $13, the same level Morgan Stanley settled on after slicing its own target from $28 to $13 in March. Scotiabank trimmed from $16.50 to $15 after the May earnings print. The consensus picture that emerges is a Street that sees limited near-term upside and is waiting for proof of execution rather than betting on the turnaround. Valuation is objectively cheap — the P/E ratio is around 5x, EV/EBITDA barely above 1.8x — but the 30-day drift lower in both multiples suggests the market is not yet willing to re-rate on value alone. The forward EPS momentum score ranks in the 84th percentile, a rare bright spot, but the short score of 62.6 and the EPS surprise rank of just 24 reflect a stock that has consistently disappointed.
Insider activity from early June adds a nuance worth noting. CEO Martin Schroeter, President Elly Keinan, Acting CFO Harsh Chugh, and General Counsel Mark Ringes all registered sales on June 2–3, with Schroeter alone selling roughly $500,000 across the two days. These are relatively small transactions in dollar terms and carry a significance score of 1, the lowest on the ORTEX scale — suggesting they likely reflect routine equity-plan sales rather than a conviction call. Net insider activity over 90 days is actually slightly positive at $5.6 million acquired versus sold. The cluster reads as administrative rather than alarming.
The next hard data point is Q1 fiscal 2027 earnings, scheduled for August 3. The recent track record makes that date consequential: the last two earnings prints each produced double-digit one-day declines, with the May 2026 release knocking the stock down 14% on the day and nearly 25% over the following week. With short interest at 12% of float, options hedging at a multi-month extreme, and the Street uniformly on the sidelines, the August 3 print becomes the moment the market will decide whether the turnaround narrative earns any fresh credibility.
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