In the local or itinerant extreme, magnetic excitations can be described by the Heisenberg model which treats electron spins as localized moments, or by the itinerant-electron model where the exchange interaction between electrons leads to unequal numbers of electrons with up and down spins. However, it has been elusive when both local moments and itinerant electrons are present in the intermediate range. Using inelastic neutron scattering, we provide direct spectroscopic evidence on the coexistence of and interplay between local moments and itinerant electrons in a van der Waals metallic ferromagnet Fe$_{2.72}$GeTe$_{2}$, which can sustain tunable room-temperature ferromagnetism down to the monolayer limit. We find that there exist ferromagnetic spin-wave excitations dispersing from the zone center at low energies resulting from local moments, and a column-like broad continuum at the zone boundary at high energies up to over 100 meV resulting from itinerant electrons. Unlike the two-dimensional crystal structure, the low-energy mode exhibits a three-dimensional nature, and the high-energy mode also has an out-of-plane dependence. Both modes persist well above the Curie temperature of 160 K. Our neutron spectroscopic data reveal that the low-energy spin waves at 100 K are more coherent than those at 4 K, which is evidence of the weakening of the Kondo screening at high temperatures. These results unambiguously demonstrate the coexistence of local moments and itinerant electrons, and the Kondo effect between these two components in Fe$_{2.72}$GeTe$_{2}$. Such behaviors are generally expected in heavy-fermion systems with heavy $f$ electrons but rarely clearly observed in materials with light $d$ electrons. These findings shed light on the understanding of magnetism in transition-metal compounds.