McDonald's Corporation(MCD) - Stock detail

McDonald's Corporation

US
MCD
McDonald's Corporation(Listing date: 04/21/1965)

McDonald's Corporation is a company registered in Delaware. The company franchises and operates McDonald's restaurants, which offer locally relevant menus of quality food and beverages in communities across more than 100 countries. The company is primarily a franchisor and believes that franchising is crucial for delivering great-tasting food, locally relevant customer experiences, and driving profitability. Franchising enables individuals to become their own employers and maintain control over all employment-related matters, marketing, and pricing decisions, while also benefiting from the strength of McDonald's global brand, operating system, and financial resources. The company's revenues include sales from company-operated restaurants as well as fees from franchised restaurants operated by traditional franchisees, developmental licensees, and affiliates.

AI Value AnalystHold
Overall Rating5.3/10
Generated at:2026-06-11 17:41:41
Analysis based on 5 financial reports from periods: 2026-03-31, 2025-12-31, 2025-09-30, 2025-06-30, and 2025-03-31. The current stock price data is as of 2026-06-11. Data appears complete for the fundamental analysis performed.
Overview

McDonald's Corporation is a global leader in the quick-service restaurant industry with strong brand power and a franchised business model. The company demonstrates consistent profitability and robust cash flow generation, but its valuation is currently full and its capital structure features high debt levels that distort some key financial ratios.

Valuation
3/10
Profitability
8/10
Financial health
5/10
Operation Advice
  • Existing investors may continue to hold for the dividend yield and long-term stability, but the current price of $284.77 does not offer a significant margin of safety or an attractive entry point for new capital.
  • Consider waiting for a pullback below $280.83 (the fundamental target price) or toward the lower end of the $239.00-$298.75 fair value range before initiating new positions.

Valuation

P/E TTM
22.48
P/E LYR
27.32
P/B MRQ
-151.71
P/S TTM
--
AI Analysis
  • The current price of $284.77 sits near the upper end of the reasonable valuation range of $239.00-$298.75, which is derived from applying a P/E range of 20x-25x to the 2025 EPS of $11.95. The TTM P/E ratio of 22.48x is at the higher end of its reasonable historical range, and the fundamental target price is calculated at $280.83 based on a P/E of 23.5x.
  • The current price as of 2026-06-11 was $284.77.
  • The trailing twelve-month (TTM) P/E ratio is 22.48, while the forward (dynamic) P/E is 27.32.
  • The TTM Price-to-Sales ratio is 7.37.
  • The P/B ratio of -151.71 is not a usable metric due to negative book value.
  • Using the full-year 2025 diluted EPS of $11.95 and a reasonable P/E range of 20x-25x for a stable company like McDonald's, the derived valuation range is $239.00 (lower bound) to $298.75 (upper bound).
  • The current price of $284.77 sits near the upper end of this calculated range, slightly above the midpoint of $268.88.
  • Based on a P/E of 23.5x applied to the 2025 EPS of $11.95, the fundamental target price is $280.83.
Valuation trend

Profitability

ROE TTM
-383.85%
Net margin
30.43%
Gross margin
55.90%
Total revenue
6.52B
AI Analysis
  • McDonald's demonstrates strong and stable core profitability with positive revenue growth, exceptionally high and stable profit margins characteristic of its franchised business model, and a healthy Return on Assets (ROA) of 14.90% (TTM).
  • Revenue has shown positive year-over-year growth in recent quarters.
  • The latest Q1 2026 revenue of $6.52B grew 9.42% from the prior year.
  • Annual revenue for 2025 was $26.89B, up 3.72%.
  • The company maintains exceptionally high and stable margins.
  • The Gross Margin for Q1 2026 was 55.90%, and the Net Margin was 30.43%.
  • These high margins are characteristic of its franchised business model, which generates significant royalty and rental income with lower operational costs.
  • Net income for Q1 2026 was $1.98B, a 6.16% increase.
  • Diluted Earnings Per Share (EPS) for the quarter was $2.78.
  • The full-year 2025 diluted EPS was $11.95.
  • The Return on Assets (ROA) of 14.90% (TTM) is a more relevant measure of profitability given the negative equity, indicating the company generates a healthy return on its total asset base.
Profitability
2025Q12025Q22025Q32025Q42026Q1
ROE TTM---125.70%-214.73%-306.48%-383.85%
Earnings
2025Q12025Q22025Q32025Q42026Q1
Total revenue5.96B12.80B19.88B26.89B6.52B

Financial health

Debt/Asset
102.14%
Current ratio
1.14
Quick ratio
1.12
Cash ratio
1.12
AI Analysis
  • The company maintains adequate short-term liquidity but has a Debt-to-Asset Ratio of 102.14%, indicating liabilities exceed assets and resulting in negative shareholder equity. This capital structure distorts key ratios like the negative P/B and ROE, but is common for mature, cash-generative companies that return capital to shareholders.
  • The company maintains adequate short-term liquidity with a Current Ratio of 1.14 and a Quick Ratio of 1.12, indicating it can cover its short-term obligations.
  • A major red flag is the Debt-to-Asset Ratio of 102.14%.
  • This indicates that the company's total liabilities exceed its total assets, resulting in negative shareholder equity on the balance sheet.
  • This is a common structure for mature, cash-generative companies like MCD that return significant capital to shareholders via dividends and buybacks, financed partly by debt.
  • However, it distorts several key ratios.
  • The negative equity is the direct cause of the extremely negative Price-to-Book (PB) ratio of -151.71 and the negative Return on Equity (ROE) of -383.85%.
  • These metrics are not meaningful in isolation for a company with this financial structure and should not be used for valuation or profitability assessment in this context.
Leverage
2025Q12025Q22025Q32025Q42026Q1
Debt/Asset106.13%104.63%103.57%103.01%102.14%
Liquidity
2025Q12025Q22025Q32025Q42026Q1
Current ratio1.181.301.000.951.14