NasdaqGS:CDK

Stock Analysis Report

Executive Summary

CDK Global, Inc. provides software and technology solutions for automotive retailers in the United States, Europe, Canada, and internationally.

Snowflake

Fundamentals

Acceptable track record with moderate growth potential.


Similar Companies

Share Price & News

How has CDK Global's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

3.7%

CDK

0.5%

US Software

2.3%

US Market


1 Year Return

-15.9%

CDK

19.6%

US Software

5.6%

US Market

Return vs Industry: CDK underperformed the US Software industry which returned 19.6% over the past year.

Return vs Market: CDK underperformed the US Market which returned 5.6% over the past year.


Shareholder returns

CDKIndustryMarket
7 Day3.7%0.5%2.3%
30 Day4.0%0.05%-1.0%
90 Day-6.2%-3.8%-0.7%
1 Year-14.8%-15.9%21.3%19.6%7.9%5.6%
3 Year-8.5%-11.2%120.2%111.6%45.6%36.3%
5 Year72.7%64.1%177.4%157.4%65.8%47.6%

Price Volatility Vs. Market

How volatile is CDK Global's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is CDK Global undervalued compared to its fair value and its price relative to the market?

25.87x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Undervalued: CDK ($48.2) is trading above our estimate of fair value ($40.56)

Significantly Undervalued: CDK is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: CDK is good value based on its PE Ratio (25.9x) compared to the Software industry average (47.5x).

PE vs Market: CDK is poor value based on its PE Ratio (25.9x) compared to the US market (17.7x).


Price to Earnings Growth Ratio

Low PEG Ratio: CDK is poor value based on its PEG Ratio (1.2x)


Price to Book Ratio

PB vs Industry: CDK has negative assets, so we can't compare its PB Ratio to the US Software industry average.


Next Steps

Future Growth

How is CDK Global forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

21.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CDK's forecast earnings growth (21.1% per year) is above the savings rate (2.7%).

Earnings vs Market: CDK's earnings (21.1% per year) are forecast to grow faster than the US market (14.5% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: CDK's revenue (4.8% per year) is forecast to grow slower than the US market (7.3% per year).

High Growth Revenue: CDK's revenue (4.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: Insufficient data to determine if CDK's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has CDK Global performed over the past 5 years?

12.5%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: CDK's earnings have grown by 12.5% per year over the past 5 years.

Accelerating Growth: CDK's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: CDK had negative earnings growth (-22.9%) over the past year, making it difficult to compare to the Software industry average (19.1%).


Return on Equity

High ROE: CDK's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.


Return on Assets

ROA vs Industry: CDK has a higher Return on Assets than the Software industry average last year.


Return on Capital Employed

ROCE Improving: CDK has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is CDK Global's financial position?


Financial Position Analysis

Short Term Liabilities: CDK has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: CDK has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.


Debt to Equity History and Analysis

Debt Level: CDK has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: CDK's has negative shareholder equity, so we do not need to check if its debt has reduced over time.

Debt Coverage: CDK's debt is not well covered by operating cash flow (16.6%).

Interest Coverage: CDK's interest payments on its debt are well covered by EBIT (4.4x coverage).


Balance Sheet

Inventory Level: CDK has a low level of unsold assets or inventory.

Debt Coverage by Assets: CDK has negative shareholder equity (liabilities exceed assets) therefore debt is not covered by short term assets.


Next Steps

Dividend

What is CDK Global's current dividend yield, its reliability and sustainability?

1.24%

Current Dividend Yield


Dividend Yield vs Market

company1.2%marketbottom25%1.5%markettop25%3.8%industryaverage1.5%forecastin3Years1.3%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: CDK's dividend (1.24%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.46%).

High Dividend: CDK's dividend (1.24%) is low compared to the top 25% of dividend payers in the US market (3.76%).

Stable Dividend: Whilst dividend payments have been stable, CDK has been paying a dividend for less than 10 years.

Growing Dividend: CDK's dividend payments have increased, but the company has only paid a dividend for 5 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (32.2%), CDK's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CDK's dividends in 3 years are forecast to be well covered by earnings (17.3% payout ratio).


Next Steps

Management

What is the CEO of CDK Global's salary, the management and board of directors tenure and is there insider trading?

2.0yrs

Average management tenure


CEO

Brian Krzanich (59yo)

0.9yrs

Tenure

US$14,461,291

Compensation

Mr. Brian M. Krzanich is Chief Executive Officer, President & Director at CDK Global Inc. since November 7, 2018. He serves as a Director of MiaSole, Inc. Mr. Krzanich served as a Director of Deere & Compa ...


CEO Compensation Analysis

Compensation vs. Market: Brian has recently become CEO, making it difficult to compare their total compensation against companies of similar size in the US market.

Compensation vs Earnings: Insufficient data to compare Brian's compensation with company performance.


Management Age and Tenure

2.0yrs

Average Tenure

48.5yo

Average Age

Experienced Management: CDK's management team is considered experienced (2 years average tenure).


Board Age and Tenure

5.1yrs

Average Tenure

59yo

Average Age

Experienced Board: CDK's board of directors are considered experienced (5.1 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$28,08319 Dec 18
Neil Packham
EntityIndividual
Shares588
Max PriceUS$47.76
BuyUS$127,40813 Nov 18
Lee Brunz
EntityIndividual
Role
Chief Legal Officer
Executive VP
Shares2,500
Max PriceUS$50.96
BuyUS$400,35513 Nov 18
Joseph Tautges
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares7,900
Max PriceUS$50.68

Ownership Breakdown


Management Team

  • John Holt (62yo)

    Senior Vice President of Digital

    • Tenure: 0yrs
    • Compensation: US$1.26m
  • Lee Brunz (49yo)

    Executive VP

    • Tenure: 5.1yrs
    • Compensation: US$1.19m
  • Brian Krzanich (59yo)

    President

    • Tenure: 0.9yrs
    • Compensation: US$14.46m
  • Joe Tautges (43yo)

    Executive VP & CFO

    • Tenure: 2.2yrs
    • Compensation: US$2.89m
  • Dean Crutchfield (58yo)

    Executive VP & Chief Information Officer

    • Tenure: 3.3yrs
    • Compensation: US$717.50k
  • Mahesh Shah (42yo)

    Executive VP and Chief Product & Technology Officer

    • Tenure: 0.5yrs
    • Compensation: US$2.10m
  • Amy Byrne (48yo)

    Executive VP and Chief Human Resources & Communications Officer

    • Tenure: 0.8yrs
    • Compensation: US$761.01k
  • Katie Coleman

    Senior Director of Investor Relation

    • Tenure: 0yrs
  • Jennifer Williams (45yo)

    VP, Corporate Controller & Chief Accounting Officer

    • Tenure: 2yrs
  • Kathy Gilbert

    Director of Sales and Business Development

    • Tenure: 0yrs

Board Members

  • Robert Radway (59yo)

    Director

    • Tenure: 5.1yrs
    • Compensation: US$279.98k
  • Frank Sowinski (62yo)

    Director

    • Tenure: 5.1yrs
    • Compensation: US$303.75k
  • Eileen Voynick (64yo)

    Director

    • Tenure: 3.1yrs
    • Compensation: US$280.99k
  • Les Brun (67yo)

    Chairman of the Board

    • Tenure: 5.1yrs
    • Compensation: US$431.25k
  • Steve Schuckenbrock (58yo)

    Director

    • Tenure: 3.1yrs
    • Compensation: US$279.96k
  • Willie Deese (64yo)

    Director

    • Tenure: 5.1yrs
    • Compensation: US$296.25k
  • Brian Krzanich (59yo)

    President

    • Tenure: 0.9yrs
    • Compensation: US$14.46m
  • Stephen Miles (51yo)

    Director

    • Tenure: 5.1yrs
    • Compensation: US$281.25k
  • Amy Hillman (54yo)

    Director

    • Tenure: 5.1yrs
    • Compensation: US$227.50k

Company Information

CDK Global, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: CDK Global, Inc.
  • Ticker: CDK
  • Exchange: NasdaqGS
  • Founded: 2014
  • Industry: Application Software
  • Sector: Software
  • Market Cap: US$5.852b
  • Shares outstanding: 121.41m
  • Website: https://www.cdkglobal.com

Number of Employees


Location

  • CDK Global, Inc.
  • 1950 Hassell Road
  • Hoffman Estates
  • Illinois
  • 60169
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CDKNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDSep 2014
C2GDB (Deutsche Boerse AG)YesCommon StockDEEURSep 2014
0HQRLSE (London Stock Exchange)YesCommon StockGBUSDSep 2014

Biography

CDK Global, Inc. provides software and technology solutions for automotive retailers in the United States, Europe, Canada, and internationally. The company offers Dealer Management System (DMS), a portfoli ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/18 00:35
End of Day Share Price2019/10/17 00:00
Earnings2019/06/30
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.