CDK Global provides integrated information technology and digital marketing/advertising solutions to the automotive retail industry worldwide. The company operates through three segments: Automotive Retail North America, Automotive Retail International, and Digital Marketing. The company was founded in 1972 and is based in Hoffman Estates, Illinois.
CDK Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for CDK Global Inc. To summarize, we found that CDK Global Inc ranked in the 39th percentile in terms of potential gain offered. We should note, though, that all scenearios modelled for this stock suggest it is overvalued. In terms of the factors that were most noteworthy in this DCF analysis for CDK, they are:
The stock's equity weight, or the proportion of capital from equity relative to debt, is 67. Notably, its equity weight is greater than merely 15.13% of US equities in the Technology sector yielding a positive free cash flow.
CDK Global Inc's weighted average cost of capital (WACC) is 7%; for context, that number is higher than only 9.98% of tickers in our DCF set.
CDK Global Inc's effective tax rate, as measured by taxes paid relative to net income, is at 20 -- greater than 80.83% of US stocks with positive free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
ADI, HQY, FIVN, UEIC, and ALRM can be thought of as valuation peers to CDK, in the sense that they are in the Technology sector and have a similar price forecast based on DCF valuation.
CDK Global, Inc. (CDK) Q4 2020 Earnings Conference Call August 04, 2020, 05:00 PM ET Company Participants Julie Schlueter - Director, IR Brian Krzanich - CEO Joe Tautges - CFO Conference Call Participants Ian Zaffino - Oppenheimer David Togut - Evercore ISI Matt Pfau - William Blair Charles Nabhan -...