US · NYSE · MCD
McDonald's (MCD) stock analysis: valuation and financials
Consumer Discretionary · Restaurants
$235.65 +0.2% Price as of Oct 12, 2026
Wide-moat franchisor with 46.2% operating margin and 25.2% ROIC, but 3.7% revenue growth, $39.0B net debt at 2.94x and a price implying 9.4% FCF growth; base case upside -13%.
- Market cap
- $166.8B
- P/E
- 19.0x
- EV/Sales
- 7.4x
- FCF yield
- 4.7%
- 52-week range
- $230.88 – $341.06
- Next earnings
- Nov 4, 2026
Research as of Oct 13, 2026
Business quality scorecard
- Growth27
- Profitability92
- Cash flow99
- Balance sheet32
- Capital allocation80
- Valuation64
0–100, computed from reported financials; higher is better, and a higher valuation score means cheaper.
How it makes money
Franchisees and licensees, about 95% of 45,356 restaurants, pay rent and royalties on their sales, while company-operated restaurants add food sales; International Operated Markets supplies 51.5% of segment profit and the U.S. 46.9%, the profit engines.
Financials by year
| FY2021Jan–Dec 2021 | FY2022Jan–Dec 2022 | FY2023Jan–Dec 2023 | FY2024Jan–Dec 2024 | FY2025Jan–Dec 2025 | |
|---|---|---|---|---|---|
| Revenue | $23.2B | $23.2B | $25.5B | $25.9B | $26.9B |
| Revenue growth | +20.9% | -0.2% | +10.0% | +1.7% | +3.7% |
| Operating margin | 44.6% | 40.4% | 45.7% | 45.2% | 46.1% |
| Net income | $7.5B | $6.2B | $8.5B | $8.2B | $8.6B |
| Free cash flow | $7.1B | $5.5B | $7.3B | $6.7B | $7.2B |
| FCF margin | 30.6% | 23.7% | 28.5% | 25.7% | 26.7% |
Amounts in USD · What is free cash flow?
Margins FY2025 operating margin 46.1% vs 45.2% FY2024; TTM 46.2%, Q2 FY2026 47.0%. Gross margin flat near 90% (Q2 FY2026 90.4% vs 90.4%). Main reason: ~95% franchised mix, franchised margins ~90% of restaurant margin dollars, plus sales-driven growth; SG&A +17% partly offsets.
- Cash flow HealthyTTM operating cash flow $11.35B exceeds net income $8.79B, cash conversion 1.17x; FY2025 OCF $10.55B versus $8.56B net income, a 12% increase. Earnings are fully cash-backed with no accrual shortfall.
- Debt ManageableNet debt $39.0B against $39.9B total debt and only $822M cash; net debt/EBITDA is 2.94x on $13.27B EBITDA, consistent with moderate leverage for an asset-heavy franchisor.
Balance sheet Leverage · Moderate
- Cash & short-term investments
- $822.0M
- Total debt
- $39.9B
- Net debt
- $39.0B
- Net debt / EBITDA
- 2.9x
- Interest coverage
- 7.9x
- Current ratio
- 1.1x
As of Jun 30, 2026 · Amounts in USD · How to read a balance sheet
Management and track record
- Management StrongDeep internal bench: CEO Kempczinski 10 years at the Company, CFO Borden over 30, Erlinger and Steijaert over 23; leadership continuity supports the Accelerating the Arches strategy.
- Credibility MediumNo quantitative revenue, EPS or margin outlook appears in any of the recent releases, so guidance-versus-actual scoring rests on strategy promises rather than numeric targets.
Valuation range
Implied value per share · Price when researched: $235.65
Each scenario assumes five years of revenue growth, an FCF margin and an exit multiple, discounted to today. The assumptions and sensitivities are in the full report.
The full report also covers
- Revenue, growth and outlook of each segment
- Moat and main competitors
- Key risks
- Capital allocation: where the free cash flow went
- What management promised, and what they delivered
- Scenario assumptions and sensitivities
- A source for every claim
- Ask AI about this company
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