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:
Below please find a table outlining a discounted cash flow forecast for CDK, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that CDK Global Inc ranked in the 53th percentile in terms of potential gain offered. More precisely, our analysis suggests the stock is undervalued by approximately 12.33% on a DCF basis. As for the metrics that stood out in our discounted cash flow analysis of CDK Global Inc, consider:
The stock's equity weight, or the proportion of capital from equity relative to debt, is 65. Its equity weight surpasses that of just 14.25% of free cash flow generating stocks in the Technology sector.
CDK Global Inc's effective tax rate, as measured by taxes paid relative to net income, is at 23 -- greater than 85.88% of US stocks with positive free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Technology that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as CDK, try COMM, BOX, CTSH, SABR, and MKSI.
Announcement of Periodic Review: Moody's announces completion of a periodic review of ratings of CDK Global, Inc. New York, May 21, 2020 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of CDK Global, Inc. and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers.