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CDK Global Inc. (CDK) Stock in a decline in premarket, Here’s Why

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CDK Global Inc. (CDK), a multinational corporation known for providing software and technology solutions to the automotive sector, is seeing its share price plummeting in the premarket. Till the writing, CDK stock has decreased some 9.76%, and as a result, currently is changing hands at $41.05.

Q4 and Yearly financial results

The company announced quarterly results for fourth quarter of fiscal year 2021, as well as the results for fiscal year 2021 ended 30th June. The results for fourth quarter depict that the company generated revenue of $420.1 million during the quarter, an increase of 12% when compared with the fourth quarter’s revenue of 2020. The revenue recorded during the year stands at $1673.2 million. That is an increase of 2% when compared with the equivalent period of 2020. The total expenses for quarter stood at $318.4 million, as compared to $281.3 million during equivalent period of 2020. The operating expenses for year 2021, stood at $1247.9 million, as compared to 1139.3 million during equivalent period of 2020. Besides, the company declared regular quarterly cash dividend was $0.15 per share. It would be payable on 30th September 2021.  Commenting on the performance, Eric Guerin, CDK chief financial officer, said that based on current financial results, he believes the company is well positioned for future times.

Arcade becoming member of CDK

On 10th August, Arcade, a software company, announced to become a member of CDK Global Partner Program. This membership would bring Arcade workforce engagement solutions to the automotive industry. Arcade’s participation would bring it closer to the automotive dealers, which are keen to increase the productivity, as well as obtain other benefits.

Carketa’s Membership

In early July, Carketa, a leading dealership solutions software company, became a member of CDK Global Partner program. The integration of Carketa has the capability to push the CDK Global partner program through a streamlined system which in turn could push the sales of vehicles to a new level.

Introduction of CDK Onepay

In mid-June, CDK introduced CDK Onepay. CDK Onepay is a dealership-wide payment solution, and is fueled by Global Payments. CDK Onepay is designed to provide users with a smooth experience with regards to end to end payments. The Onepay also enables dealerships to request the payments, through aid of text, call through in person as well. It also provides dealerships with a facility to complete a totally integrated invoicing system. CDK Onepay is offered to the clients with no subscription fees.

Q3 financial results

In early May, CDK released quarterly results for third quarter of fiscal year 2021. According to details, the revenue recorded by the company during quarter stood at $433.1 million, an increase of 2% when compared with the revenue for equivalent period of 2020. The total expenses for quarter stood at $311.5 million, as compared to total expenses of $280.4 million during equivalent period of 2020.

Future for CDK stock

Looking ahead, it seems that the company is on track to attain financial stronghold in near future. The estimates say that company’s revenue for next year could stand at $121.54 million. The growth estimates depict that company could grow by 11.47% per annum during next 5 years. The EPS for this year could increase by 31.20%. All in all, based upon these statistics, potential investors should keenly watch CDK stock in near future.

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