CDK Global Inc (CDK)
US12508E1010 - Common Stock
We assign a fundamental rating of 3 out of 10 to CDK. CDK was compared to 276 industry peers in the Software industry. Both the profitability and financial health of CDK have multiple concerns. While showing a medium growth rate, CDK is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
CDK had positive earnings in the past year.
Each year in the past 5 years CDK has been profitable.
Each year in the past 5 years CDK had a positive operating cash flow.
1.2 Ratios
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.7% | ||
| ROE | 57.97% | ||
| ROIC | 12.39% |
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.33% | ||
| PM (TTM) | 14.28% | ||
| GM | N/A |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
CDK has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
CDK has about the same amout of shares outstanding than it did 1 year ago.
The debt/assets ratio for CDK has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 3.76 indicates that CDK is not in any danger for bankruptcy at the moment.
CDK has a Debt/Equity ratio of 4.11. This is a high value indicating a heavy dependency on external financing.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.11 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 3.76 |
ROIC/WACC1.21
WACC10.25%
2.3 Liquidity
A Current Ratio of 1.25 indicates that CDK should not have too much problems paying its short term obligations.
A Quick Ratio of 1.25 indicates that CDK should not have too much problems paying its short term obligations.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.25 | ||
| Quick Ratio | 1.25 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 6.50% over the past year.
The Earnings Per Share has been growing by 9.79% on average over the past years. This is quite good.
CDK shows a small growth in Revenue. In the last year, the Revenue has grown by 3.16%.
The Revenue has been decreasing by -4.57% on average over the past years.
EPS 1Y (TTM)6.5%
EPS 3Y-5.5%
EPS 5Y9.79%
EPS growth Q2Q13.04%
Revenue 1Y (TTM)3.16%
Revenue growth 3Y-9.71%
Revenue growth 5Y-4.57%
Revenue growth Q2Q6.14%
3.2 Future
CDK is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 10.50% yearly.
Based on estimates for the next years, CDK will show a small growth in Revenue. The Revenue will grow by 5.42% on average per year.
EPS Next Y7.22%
EPS Next 2Y8.72%
EPS Next 3Y10.13%
EPS Next 5Y10.5%
Revenue Next Year7.12%
Revenue Next 2Y5.9%
Revenue Next 3Y5.88%
Revenue Next 5Y5.42%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 18.56, which indicates a rather expensive current valuation of CDK.
Compared to an average S&P500 Price/Earnings ratio of 24.92, CDK is valued a bit cheaper.
A Price/Forward Earnings ratio of 16.79 indicates a correct valuation of CDK.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.49, CDK is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.56 | ||
| Fwd PE | 16.79 |
4.2 Price Multiples
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 14.28 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates CDK does not grow enough to justify the current Price/Earnings ratio.
PEG (NY)2.57
PEG (5Y)1.9
EPS Next 2Y8.72%
EPS Next 3Y10.13%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.09%, CDK has a reasonable but not impressive dividend return.
Compared to an average S&P500 Dividend Yield of 2.41, CDK's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.09% |
5.2 History
The dividend of CDK has a limited annual growth rate of 0.56%.
CDK has been paying a dividend for over 5 years, so it has already some track record.
Dividend Growth(5Y)0.56%
Div Incr YearsN/A
Div Non Decr YearsN/A
5.3 Sustainability
CDK pays out 28.50% of its income as dividend. This is a sustainable payout ratio.
CDK's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP28.5%
EPS Next 2Y8.72%
EPS Next 3Y10.13%
CDK Global Inc
NASDAQ:CDK (7/5/2022, 7:00:03 PM)
After market: 54.8 +0.04 (+0.07%)54.76
-0.08 (-0.15%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap6.39B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.09% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(4)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
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Min Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.56 | ||
| Fwd PE | 16.79 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)2.57
PEG (5Y)1.9
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.7% | ||
| ROE | 57.97% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 25.33% | ||
| PM (TTM) | 14.28% | ||
| GM | N/A | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.61
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.11 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.25 | ||
| Quick Ratio | 1.25 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)6.5%
EPS 3Y-5.5%
EPS 5Y
EPS growth Q2Q
EPS Next Y7.22%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)3.16%
Revenue growth 3Y-9.71%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y