Company Overview
McDonald’s Corp operates a global network of quick-service restaurants under the McDonald’s brand. The company is based in the United States and competes within the Hotels, Restaurants & Leisure industry. Its business model combines franchised and company-operated restaurants that generate recurring royalty and sales income. With about 710 million shares outstanding, the company’s market capitalization is approximately USD 232 billion.
Analysis of recent data
FundamentalsMcDonald’s reported USD figures for 2025 showing revenue of 16.55 billion, EBIT of 12.39 billion, and net income of 8.56 billion. Revenue grew 5.3% from the prior year, reflecting steady top-line expansion.
Depreciation and amortization totaled 2.20 billion, while capital expenditure reached 3.37 billion. The free cash flow proxy, excluding working capital changes, was 8.89 billion, indicating strong cash generation capacity.
Margins remain wide, with a 46.09% operating margin and 31.85% net margin supporting robust profitability. The company’s return on equity of 95.13% highlights efficient capital use, though the total debt of 39.97 billion underscores balance sheet leverage.
Cash was not provided, limiting visibility into short-term liquidity. The low beta of 0.50 suggests relatively low market volatility compared to peers.
Valuation
DCF / MultiplesThe stock trades at USD 326.46, while the DCF fair value range is 209.32 (bear), 368.40 (base), and 580.52 (bull). The base case sits modestly above the current price, implying moderate upside potential.
At 27.08× earnings and 21.34× EV/EBITDA, investors appear to value McDonald’s for its stability and consistent cash generation. The wide margins support these multiples, but the high debt load remains a key factor in assessing fair value resilience.
Conclusion
TakeawayMcDonald’s continues to show strong profitability and cash flow generation. The valuation suggests the market expects steady performance. Debt levels remain the main constraint on flexibility. Investors may prefer more clarity on liquidity before increasing exposure.