Market Analysts see CDK Global Inc. [CDK] falling to $48. Time to buy?

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CDK Global Inc. [NASDAQ: CDK] loss -0.02% on the last trading session, reaching $54.39 price per share at the time. The company report on May 4, 2022 that CDK Global, Inc. Announces Initial Results of Its Tender Offers and Consent Solicitations, Receipt of Requisite Consents and Expiration of Withdrawal Rights and Extension of the Consent Time of the Tender Offer for Its 2024 Notes and the Expiration Date of each Tender Offer.

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CDK Global, Inc. (Nasdaq: CDK) (“CDK” or the “Company”), a leading automotive retail technology company, today announced the initial results of and the receipt of required consents in connection with its previously announced tender offers (the “Tender Offers”) relating to any and all of its issued and outstanding 4.500% Senior Notes due 2024, the interest rate of which adjusts from time to time and is currently 5.000% (the “2024 Notes”), 4.875% Senior Notes due 2027 (the “2027 Notes”) and 5.250% Senior Notes due 2029 (the “2029 Notes” and, together with the 2024 Notes and the 2027 Notes, the “Notes”) pursuant to its Offer to Purchase and Consent Solicitation Statement dated April 20, 2022 (the “Offer to Purchase and Consent Solicitation Statement”). In addition, CDK today announced that it is extending the Consent Time (as defined below) of the Tender Offer relating to the 2024 Notes and the Expiration Date (as defined below) of each Tender Offer. In conjunction with the Tender Offers, CDK solicited from holders of the Notes consents (the “Solicitations”) to the adoption of proposed amendments to each of the indentures governing the Notes (together, the “Indentures”) to, among other things, eliminate any obligation to make a Change of Control Offer (as defined in the applicable Indenture), substantially all of the other restrictive covenants and certain events of default and other provisions (the “Proposed Amendments”).

The following table sets forth certain information regarding the Notes and the Tender Offers, including the percentage of the outstanding aggregate principal amount of each series of Notes that was validly tendered and not validly withdrawn on or prior to 5:00 P.M., New York City time, on May 3, 2022 (such time and date, as the same may be extended with respect to a Tender Offer, the “Consent Time”):.

CDK Global Inc. represents 118.20 million in outstanding shares, while the company has a total market value of $6.36 billion with the latest information. CDK stock price has been found in the range of $54.355 to $54.475.

If compared to the average trading volume of 1.88M shares, CDK reached a trading volume of 3882849 in the most recent trading day, which is why market watchdogs consider the stock to be active.

Here is what top equities market gurus are saying about CDK Global Inc. [CDK]:

Based on careful and fact-backed analyses by Wall Street experts, the current consensus on the target price for CDK shares is $61.25 per share. Analysis on target price and performance of stocks is usually carefully studied by market experts, and the current Wall Street consensus on CDK stock is a recommendation set at 2.00. This rating represents a strong Buy recommendation, on the scale from 1 to 5, where 5 would mean strong sell, 4 represents Sell, 3 is Hold, and 2 indicates Buy.

Morgan Stanley have made an estimate for CDK Global Inc. shares, keeping their opinion on the stock as Equal-Weight, with their previous recommendation back on December 16, 2021. The new note on the price target was released on June 08, 2020, representing the official price target for CDK Global Inc. stock. Previously, the target price had yet another raise to $65, while Wells Fargo analysts kept a Overweight rating on CDK stock.

The Average True Range (ATR) for CDK Global Inc. is set at 0.50, with the Price to Sales ratio for CDK stock in the period of the last 12 months amounting to 3.67. The Price to Book ratio for the last quarter was 16.00, with the Price to Cash per share for the same quarter was set at 0.93. Price to Free Cash Flow for CDK in the course of the last twelve months was 24.04 with Quick ratio for the last quarter at 1.40.

Trading performance analysis for CDK stock

CDK Global Inc. [CDK] fell into the red zone at the end of the last week, falling into a negative trend and dropping by -0.02. With this latest performance, CDK shares gained by 10.48% in over the last four-week period, additionally plugging by 24.98% over the last 6 months – not to mention a rise of 0.70% in the past year of trading.

Overbought and oversold stocks can be easily traced with the Relative Strength Index (RSI), where an RSI result of over 70 would be overbought, and any rate below 30 would indicate oversold conditions. An RSI rate of 50 would represent a neutral market momentum. The current RSI for CDK stock in for the last two-week period is set at 72.60, with the RSI for the last a single of trading hit 72.52, and the three-weeks RSI is set at 70.72 for CDK Global Inc. [CDK]. The present Moving Average for the last 50 days of trading for this stock 50.04, while it was recorded at 54.41 for the last single week of trading, and 44.67 for the last 200 days.

CDK Global Inc. [CDK]: A deeper dive into fundamental analysis

Operating Margin for any stock indicates how profitable investing would be, and CDK Global Inc. [CDK] shares currently have an operating margin of +26.14 and a Gross Margin at +52.44. CDK Global Inc.’s Net Margin is presently recorded at +10.85.

Return on Total Capital for CDK is now 20.39, given the latest momentum, and Return on Invested Capital for the company is 8.62. When it comes to the capital structure of this company, CDK Global Inc. [CDK] has a Total Debt to Total Equity ratio set at 340.70. Additionally, CDK Total Debt to Total Capital is recorded at 77.31, with Total Debt to Total Assets ending up at 60.39. Long-Term Debt to Equity for the company is recorded at 336.44, with the Long-Term Debt to Total Capital now at 76.34.

Reflecting on the efficiency of the workforce at the company, CDK Global Inc. [CDK] managed to generate an average of $27,923 per employee. Receivables Turnover for the company is 4.98 with a Total Asset Turnover recorded at a value of 0.60.CDK Global Inc.’s liquidity data is similarly interesting compelling, with a Quick Ratio of 1.40 and a Current Ratio set at 1.40.

CDK Global Inc. [CDK]: An earnings per share (EPS) analysis

The progress of the company may be observed through the prism of EPS growth rate, while Wall Street analysts are focusing on predicting the 5-year EPS growth rate for CDK. When it comes to the mentioned value, analysts are expecting to see the 5-year EPS growth rate for CDK Global Inc. go to 10.00%.

An analysis of insider ownership at CDK Global Inc. [CDK]

There are presently around $5,875 million, or 94.70% of CDK stock, in the hands of institutional investors. The top three institutional holders of CDK stocks are: BLACKROCK INC. with ownership of 21,272,636, which is approximately 14.142% of the company’s market cap and around 0.30% of the total institutional ownership; VANGUARD GROUP INC, holding 10,751,360 shares of the stock with an approximate value of $584.87 million in CDK stocks shares; and HARRIS ASSOCIATES L P, currently with $349.55 million in CDK stock with ownership of nearly 10.519% of the company’s market capitalization.

203 institutional holders increased their position in CDK Global Inc. [NASDAQ:CDK] by around 11,195,465 shares. Additionally, 177 investors decreased positions by around 11,610,510 shares, while 127 investors held positions by with 85,195,108 shares. The mentioned changes placed institutional holdings at 108,001,083 shares, according to the latest SEC report filing. CDK stock had 77 new institutional investments in for a total of 2,454,379 shares, while 45 institutional investors sold positions of 6,835,935 shares during the same period.