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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Cdk Global, Inc. (XNAS:CDK) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
CDK
Name:
CDK GLOBAL, INC. (XNAS:CDK)
Sector:
42.10M
Industry:
Software�Application
CEO:
Mr. Brian Krzanich
Total Employees:
6,500
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -107.59% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF CDK GLOBAL, INC.(CDK) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SOFTWARE�APPLICATION INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
54.84
One Month Price Target:
$55.13
Six Month Price Target :
$56.6
Likely Price in One Year's Time:
Ticker:
$58.35
Likely Trading Range Today Under (Normal Volatility)
$54.65
Price Upper limit ($) :
$55.05
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$52.52
This week:
$49.65
This month :
$44.47
Other Primary facts
Market Cap:
6.39B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
116.70M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
11.25%
-14.83%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$65.60
$60.68
$44.08
$49.00
Medium risk (<10%) entry points
Buy Call
Sell Call
$59.08
Buy Put:
Sell Put:
$58.03
$50.59
$51.65
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
CDK
Sharpe Ratio:
0.78%
Comparison:
CDK, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -18.92% lower than the industry
& is -65.71% lower than the market/S&P 500 average
Average Returns/Yield of
CDK
Daily returns:
0.03%
Weekly returns:
0.13%
Monthly returns:
0.50%
Yearly returns:
9.94%
Comparison of returns:
Average annual returns/yield (last 3 years) is -39.54% below industry average
Classification:
CDK, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.31
Statistical test of Returns:
CDK has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.07%
Weekly Volatility:
4.63%
Monthly Volatility:
9.26%
Yearly Volatility:
32.08%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
-
-
Value at Risk Analysis (VaR)
Daily VaR:
-4.23%
Weekly VaR:
-9.46%
Monthly VaR:
-18.91%
How Much Can the price of
CDK
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-16%
Worst case (decline):
-65.51%
This translates to price declining to:
$45.83
This translates to price declining to:
$18.92
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
CDK is a 33.47% riskier investment compared to the market/S&P 500 & is 14.34% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -42.38% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
CDK
Beta in relation to market/S&P 500--0.95
Expected beta in 1 year's time:
-
Expected beta in 3 year's time:
-
Unlevered (debt free) Beta:
0.269
Beta in relation to Nasdaq (XNAS):
0.432
Beta in relation to all global stocks::
0.636
Beta Comparison & Analysis
Beta of competitors/peers::
1.399
Beta is -31.83% lower than peers
Average Industry Beta:
1.335
Beta is -28.59% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
218.93%
Sustainable growth rate is 603.91% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.037
Alpha is 55.64% above industry average alpha yield
Alpha is -234% below the market average
Analysis of Cost of Capital of
CDK
Equity cost of capital:
0.097
Equity cost of capital is -21.27% below industry mean WACC
Unlevered (without debt) cost of capital:
2.73%
Before-tax cost of debt:
5.62%
After-tax cost of debt:
4.44%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
4.44%
WACC is -27.99% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$15.05
Revenue growth rate per share of (3Y):
13.87
Annual revenue growth rate is -114.90% below industry average
EPS:
-
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$1.32
Balance sheet equity growth per share: 1.53%
Equity growth rate per share is -0.05% lower than the industry
Debt per share
$13.59
EBITDA per share
$4.76
Valuation Analysis Today of
CDK
P/E Ratio:
27.98
P/E Ratio of Competitors/Peers:
36.54
P/E ratio is -23.43% lower than main peers & is -84.25% lower than the industry
-
-
Share value as per dividend discount (DDM) model: $14.44
Present value of the expected future dividends only: $6.20
P/S (Price to Sales ratio):
3.64
Price to sales ratio is -68.24% below the industry mean
P/B (Price to book value ratio):
13.87
Price to free cash flow: 41.59
Price to free cash flow ratio is -49.17% lower than the industry
Net income growth rate (3Y):
202.58%
Net income growth rate is -17.03% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 7.21%
Dividend yeild: 1.09%
Previous Dividend: $0.15
Previous adjusted dividend: $0.15
Previous Dividend: $0.60
-
-
Average dividend payment (long-term): $0.15
Average dividend increase/decrease (growth rate) % per period: 0.00%
Expected next dividend payment date: 27/09/2022
Expected next dividend record date: 19/09/2022
-
Previous dividend payment date: 29/06/2022
Previous dividend record date: 20/06/2022
-
Dividend History:
2022-06-16--$0.15
2021-11-30--$0.15
2021-06-18--$0.15
2022-02-28--$0.15
2021-08-31--$0.15
2021-03-05--$0.15
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
354.51%
Net debt to equity ratio:
337.53%
Debt to assets ratio:
60.19%
Net debt to assets ratio:
57.31%
Debt-to-asset ratio is 9.70% above industry average
Ability to repay debt:
Interest coverage ratio:
6.21
Interest coverage ratio is -88.31% less than industry average
Looking forward:
Debt growth rate:
-40.44%
Annual debt growth is -104% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.09%
Analysis of Key Statistics
Correlation of price movement with the market:
0.471
Statistical significance of correlation:
CDK has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.503
Stock price is -6.30% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.503
Correlation of price movement with Nasdaq (^IXIC):
0.027
Covariance of price movement with the market:
0.034
Kurtosis
8.788
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.314
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
CDK
Gross Profit Margin Ratio:
191%
Operating Profit Margin Ratio:
25.33%
Operating profit margin is -232.22% lower than the industry
Net Profit Margin Ratio:
191%
Effective Tax Rate:
28.24%
Effective tax rate is 7.07% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
56.08%
Return on equity (ROE) is -528.78% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
9.52%
Return on assets (ROA) is -347.91% lower than the industry
Financial Leverage:
2.5x
Current Ratio:
1.42
Current ratio is -52.51% below industry average
Cash Conversion Cycle (days):
40.2
Cash conversion cycle is -57.62% below industry average
The remaining useful life of property plant & equipment is: 3.4 years
Stock based compensation to net income ratio:
4.50%
In-depth Efficiency Analysis
Revenue generated per employee:
270.2K
Each employee generates -22% less revenue than industry average revenue per employee
EBITDA generated per employee:
85.4K
Each employee generates 695% more EBITDA than industry average revenue per employee
Profit generated per employee:
38.6K
Each employee generates -321% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
6.5K
Each employee generates -183% less free cash flow than industry average revenue per employee
Assets/Capital per employee
332.1K
Each employee generates -183% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
CDK
CIRRUS LOGIC, INC. (XNAS:CRUS)
SITIME CORPORATION (XNAS:SITM)
MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC. (XNAS:MTSI)
DIGITAL TURBINE, INC. (XNAS:APPS)
VICOR CORPORATION (XNAS:VICR)
NCINO, INC. (XNAS:NCNO)
POWER INTEGRATIONS, INC. (XNAS:POWI)
QUALYS, INC. (XNAS:QLYS)
SEMTECH CORPORATION (XNAS:SMTC)
Current Analyst Ratings
Strong buy�13%
Buy�4%
Hold�8%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
1.76B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
919.10M
837.40M
-
-
392.40M
-
-
392.40M
-
89.40M
119.30M
555.40M
445.00M
250.90M
339.20M
95.80M
250.90M
Statement of Cash Flow
Date:
Period:
27.60M
Differed Income Tax :
300.00K
Stock Based Compensation :
11.30M
Change in Working Capital :
- 41100.00K
Accounts Receivables:
3.60M
Other Working Capital:
-
Other Non-Cash Items:
1.70M
Net Cash Provided by Operating Activities:
71.50M
Investments in PP&E:
-
Net Acquisitions:
- 2100.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
9/30/21
2022
Q1
80.80M
-
80.80M
234.80M
-
161.10M
476.70M
66.40M
1.30B
337.10M
-
-
458.30M
2.16B
-
2.64B
23.60M
4.80M
-
29.60M
277.10M
335.10M
1.59B
101.30M
1.84B
-
2.17B
1.60M
2.05B
70.6M
- 1675400.00K
September 30, 2021 at 6:00:00 AM
1.31B
447.40M
2.62B
-
1.59B
1.5B
-
- 29400.00K
- 31500.00K
- 1400.00K
-
- 88300.00K
- 18100.00K
- 9900.00K
- 117700.00K
- 500.00K
- 78200.00K
99.00M
177.20M
71.50M
- 29400.00K
42.10M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
CDK
2023
2024
2025
2026
2027
$43.76
$46.57
$49.55
$52.73
$56.11