DCF Tool

CDK

CDK Global Inc – Software Publishers
CDK Global is a leading provider of integrated data and technology solutions to the automotive, heavy truck, recreation and heavy equipment industries. Focused on enabling end-to-end, omnichannel retail commerce through open, agnostic technology, CDK Global provides solutions to dealers and original equipment manufacturers, serving nearly 15,000 retail locations in North America. CDK solutions connect people with technology by automating and integrating all parts of the dealership and buying process, including the acquisition, sale, financing, insuring, parts supply, repair and maintenance of vehicles.
Analysis Results
Intrinsic Value $93.98
Latest Price $54.30
Relative Value 42% undervalued
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Cash Flow (Millions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 3.0%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 5.4%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 3.0%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (million) Present value (million)
2022 382 362
2023 393 354
2024 405 345
2025 417 337
2026 430 329
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 12700 million. This corresponds to a present value of 9240 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 1730 million. Adding in the terminal value gives a total present value of 11000 million.

There are presently 117.0 million outstanding shares, so the intrinsic value per share is 93.98.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 562,300,000
Current Cash 157,000,000
Current Liabilities 368,300,000
Current Debt 7,100,000
Non-Cash Working Capital (NCWC) 44,100,000
Change in NCWC 80,300,000
EBIT 410,000,000
Tax Provision 94,500,000
Depreciation and Amortization 98,700,000
Capital Expenditure -95,400,000
Unlevered Free Cash Flow 357,509,378
Current Assets 685,600,000
Current Cash 215,700,000
Current Liabilities 526,800,000
Current Debt 20,700,000
Non-Cash Working Capital (NCWC) -36,200,000
Change in NCWC -144,800,000
EBIT 561,000,000
Tax Provision 120,400,000
Depreciation and Amortization 99,600,000
Capital Expenditure -82,000,000
Unlevered Free Cash Flow 274,572,277
Current Assets 987,100,000
Current Cash 311,400,000
Current Liabilities 837,900,000
Current Debt 270,800,000
Non-Cash Working Capital (NCWC) 108,600,000
Change in NCWC 48,900,000
EBIT 553,300,000
Tax Provision 62,200,000
Depreciation and Amortization 89,800,000
Capital Expenditure -92,300,000
Unlevered Free Cash Flow 486,454,656
Current Assets 1,367,300,000
Current Cash 804,400,000
Current Liabilities 548,400,000
Current Debt 45,200,000
Non-Cash Working Capital (NCWC) 59,700,000
Change in NCWC 13,100,000
EBIT 615,400,000
Tax Provision 123,300,000
Depreciation and Amortization 79,100,000
Capital Expenditure -85,300,000
Unlevered Free Cash Flow 474,099,179
Current Assets 1,278,800,000
Current Cash 726,100,000
Current Liabilities 552,600,000
Current Debt 46,500,000
Non-Cash Working Capital (NCWC) 46,600,000
Change in NCWC 23,600,000
EBIT 507,600,000
Tax Provision 132,800,000
Depreciation and Amortization 70,300,000
Capital Expenditure -93,700,000
Unlevered Free Cash Flow 352,942,935
Current Assets 738,700,000
Current Cash 219,100,000
Current Liabilities 523,400,000
Current Debt 26,800,000
Non-Cash Working Capital (NCWC) 23,000,000
Change in NCWC 31,400,000
EBIT 422,700,000
Tax Provision 122,300,000
Depreciation and Amortization 64,000,000
Capital Expenditure -64,300,000
Unlevered Free Cash Flow 313,739,826
Current Assets 885,200,000
Current Cash 408,200,000
Current Liabilities 498,400,000
Current Debt 13,000,000
Non-Cash Working Capital (NCWC) -8,400,000
Change in NCWC -48,200,000
EBIT 359,200,000
Tax Provision 113,600,000
Depreciation and Amortization 76,500,000
Capital Expenditure -63,900,000
Unlevered Free Cash Flow 187,537,579

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