54.76
-0.08 (-0.15%)
At close: Jul 5, 2022
54.8
+0.04 (+0.07%)
After Hours: 7/5/2022, 8:00:03 PM
Taking everything into account, CDK scores 2 out of 10 in our fundamental rating. CDK was compared to 278 industry peers in the Software industry. CDK may be in some trouble as it scores bad on both profitability and health. CDK is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
- CDK had positive earnings in the past year.
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
- With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), CDK is creating some value.
- CDK has about the same amout of shares outstanding than it did 1 year ago.
- Compared to 1 year ago, CDK has an improved debt to assets ratio.
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
- CDK has a Current Ratio of 1.25. This is a normal value and indicates that CDK is financially healthy and should not expect problems in meeting its short term obligations.
- CDK has a Quick Ratio of 1.25. This is a normal value and indicates that CDK is financially healthy and should not expect problems in meeting its short term obligations.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.25 | ||
| Quick Ratio | 1.25 |
3. Growth
3.1 Past
- CDK shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 6.50%.
- CDK shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 9.79% yearly.
- Looking at the last year, CDK shows a small growth in Revenue. The Revenue has grown by 3.16% in the last year.
- 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 Q2Q%13.04%
Revenue 1Y (TTM)3.16%
Revenue growth 3Y-9.71%
Revenue growth 5Y-4.57%
Sales Q2Q%6.14%
3.2 Future
- The Earnings Per Share is expected to grow by 10.50% on average over the next years. This is quite good.
- CDK is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.42% yearly.
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
- The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 18.56, the valuation of CDK can be described as rather expensive.
- CDK's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.30.
- The Price/Forward Earnings ratio is 16.79, which indicates a correct valuation of CDK.
- When comparing the Price/Forward Earnings ratio of CDK to the average of the S&P500 Index (25.57), we can say CDK is valued slightly 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
- CDK has a Yearly Dividend Yield of 1.09%. Purely for dividend investing, there may be better candidates out there.
- Compared to the average S&P500 Dividend Yield of 1.82, CDK is paying slightly less dividend.
| 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
- 28.50% of the earnings are spent on dividend by CDK. This is a low number and sustainable payout ratio.
- The dividend of CDK is growing, but earnings are growing more, so the dividend growth is sustainable.
DP28.5%
EPS Next 2Y8.72%
EPS Next 3Y10.13%
CDK Global Inc / CDK FAQ
What is the fundamental rating for CDK stock?
ChartMill assigns a fundamental rating of 5 / 10 to CDK.
Can you provide the valuation status for CDK Global Inc?
ChartMill assigns a valuation rating of 3 / 10 to CDK Global Inc (CDK). This can be considered as Overvalued.
Can you provide the profitability details for CDK Global Inc?
CDK Global Inc (CDK) has a profitability rating of 8 / 10.
Can you provide the PE and PB ratios for CDK stock?
The Price/Earnings (PE) ratio for CDK Global Inc (CDK) is 18.56 and the Price/Book (PB) ratio is 14.77.
Can you provide the financial health for CDK stock?
The financial health rating of CDK Global Inc (CDK) is 4 / 10.