Head-To-Head Comparison: CDK Global (CDK) vs. athenahealth (ATHN)

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CDK Global (NASDAQ:CDK) and athenahealth (NASDAQ:ATHN) are both mid-cap computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their risk, institutional ownership, earnings, profitability, dividends, valuation and analyst recommendations.

Analyst Ratings

This is a summary of current recommendations and price targets for CDK Global and athenahealth, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CDK Global 0 2 2 0 2.50
athenahealth 0 13 6 0 2.32

CDK Global presently has a consensus target price of $72.25, suggesting a potential upside of 42.31%. athenahealth has a consensus target price of $153.79, suggesting a potential upside of 27.79%. Given CDK Global’s stronger consensus rating and higher probable upside, equities research analysts clearly believe CDK Global is more favorable than athenahealth.

Profitability

This table compares CDK Global and athenahealth’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CDK Global 17.23% -182.32% 16.34%
athenahealth 8.71% 14.71% 9.30%

Dividends

CDK Global pays an annual dividend of $0.60 per share and has a dividend yield of 1.2%. athenahealth does not pay a dividend. CDK Global pays out 19.7% of its earnings in the form of a dividend. CDK Global has raised its dividend for 3 consecutive years.

Institutional & Insider Ownership

82.2% of CDK Global shares are owned by institutional investors. 0.5% of CDK Global shares are owned by company insiders. Comparatively, 2.9% of athenahealth shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Volatility and Risk

CDK Global has a beta of 0.76, meaning that its stock price is 24% less volatile than the S&P 500. Comparatively, athenahealth has a beta of 0.8, meaning that its stock price is 20% less volatile than the S&P 500.

Valuation & Earnings

This table compares CDK Global and athenahealth’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CDK Global $2.27 billion 2.88 $380.80 million $3.04 16.70
athenahealth $1.22 billion 3.99 $53.10 million $1.57 76.66

CDK Global has higher revenue and earnings than athenahealth. CDK Global is trading at a lower price-to-earnings ratio than athenahealth, indicating that it is currently the more affordable of the two stocks.

Summary

CDK Global beats athenahealth on 10 of the 17 factors compared between the two stocks.

CDK Global Company Profile

CDK Global, Inc. provides software and technology solutions for automotive retailers in the United States and internationally. The company operates through Retail Solutions North America, Advertising North America, and CDK International segments. The company offers Dealer Management System (DMS), a portfolio of layered software applications and services for automotive retailers, original equipment manufacturers (OEMs), consumers, and other industry participants manage the acquisition, sale, financing, insuring, parts supply, and repair and maintenance of vehicles. It also provides solutions to retailers and manufacturers of heavy trucks, construction equipment, agricultural equipment, motorcycles, boats, and other marine and recreational vehicles. In addition, the company offers advertising solutions, such as the management of digital advertising spend for automotive retailers, automotive retailer associations, and OEMs; and professional services, custom programming, consulting, implementation, and training solutions, as well as customer support solutions. It serves approximately 28,000 retail locations and OEMs. CDK Global, Inc. is headquartered in Hoffman Estates, Illinois.

athenahealth Company Profile

athenahealth, Inc., together with its subsidiaries, provides network-based medical record, revenue cycle, patient engagement, care coordination, and population health services for medical groups and health systems. It offers athenaCollector, a network-enabled billing and practice management solution; athenaClinicals, an electronic health record for managing patient's clinical documentation; athenaCommunicator, an engagement and communication solution that provides an automated communication service between patients and provider practices for interactions outside the exam room; and athenaCoordinator for order transmission and care coordination services. The company also provides athenahealth Population Health, a cloud-based population health service; and Epocrates services that include clinical information and decision support services in the areas of drug and disease information, medical calculator and tools, clinical guidelines, clinical messaging, and market research. In addition, it offers athenahealth Health Plan data exchange facilitates to exchange the data between providers and health plans for the healthcare operations of clients; athenaOne Analytics that includes an analytics and dashboard application, as well as provides visibility into the financial and operational health of an organization; and pre-certification processing and referral processing services. The company serves healthcare providers, medical groups, and health systems through its direct sales force and channel partners in the United States and internationally. athenahealth, Inc. was formerly known as athenahealth.com, Inc. and changed its name to athenahealth, Inc. in November 2000. The company was founded in 1997 and is headquartered in Watertown, Massachusetts.

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