Valuation Overview

Growth Story

Over the next few years, revenue is expected to grow by 6.79%, higher than industry average of 3.46%.

Growth Trajectory

Profitability

In the growth phase company makes 40.28% profit on every dollar of sales, higher than industry average of 10.40%.

Profitability Trajectory

Risk Profile

Investors expect at least 4.99% return to justify the risk of holding stock.

Risk vs Return

Required Return (Cost of Capital) (%)
Return on Invested Capital (%)

Financial Health Overview

Enterprise Value
155.49B USD
Equity Value
101.50B USD
FCF Yield
47.17%
Average ROIC
18.81%
Cost of Capital
6.38%
P/E Ratio
22.82x
Financial MetricMost Recent 12 months (USD)Previous Year (USD)
Revenues26.06B USD25.92B USD
Operating Income or EBIT12.37B USD12.15B USD
Interest Expense1.53B USD1.51B USD
Book Value Of Equity-2.76B USD-3.80B USD
Book Value Of Debt55.87B USD51.95B USD
Cash and Marketable Securities1.88B USD1.08B USD
Number of Shares Outstanding713.60M--
Minority interests0 USD0 USD
Current Stock Price312.52 USD--
Effective Tax Rate21.00%--
Marginal Tax Rate25.00%--

Performance vs Industry

Revenue Growth
-2.92%
0.54%Company
vs
3.45%Industry
Below Industry
Operating Margin
+37.06%
47.45%Company
vs
10.40%Industry
Above Industry
McDonald's Corporation demonstrates superior operational efficiency with margins above industry average, indicating effective cost management.

Terminal Value Analysis

Growth Rate
4.59%
Cost of Capital
8.83%
Return on Capital
8.83%
Reinvestment Rate
52.09%
Terminal value represents 52% of total enterprise value, based on 4.59% perpetual growth and 8.83% discount rate.

Equity Value Breakdown

ComponentValueType
Present Value (Terminal Value) 81.23B USD Add
Present Value (Cash Flow Over Next 10 Years) 74.25B USD Add
Value of Operating Assets 155.49B USD Sub-total
Debt 55.86B USD Subtract
Minority Interests — Subtract
Cash 1.87B USD Add
Value of Equity 101.50B USD Sub-total
Number of Shares 713.60M shares Divisor
Estimated Value per Share (Fair Value) 142.23 USD Total
Current Market Price 312.52 USD Reference

Financial Projections

Total FCF Present Value
74.25B USD
Avg Revenue Growth
5.39%
Avg Operating Margin
38.67%
Avg ROIC
18.81%
Year 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Terminal Year
REVENUE
Revenue27.52B USD29.38B USD31.38B USD33.51B USD35.78B USD38.06B USD40.31B USD42.51B USD44.65B USD46.71B USD48.86B USD
Growth Rate 5.61% 6.78% 6.78% 6.78% 6.78% 6.34% 5.91% 5.47% 5.03% 4.59% 4.59%
PROFITABILITY
Operating Income13.06B USD12.54B USD12.64B USD12.69B USD12.69B USD13.50B USD14.30B USD15.08B USD15.84B USD16.57B USD17.33B USD
Operating Margin 47.45% 42.67% 40.27% 37.88% 35.48% 35.48% 35.48% 35.48% 35.48% 35.48% 35.48%
EBIT (1-tax)10.31B USD9.90B USD9.98B USD10.02B USD10.03B USD10.56B USD11.07B USD11.55B USD12.01B USD12.43B USD13.00B USD
CASH FLOW
Reinvestment518.40M USD553.57M USD591.14M USD631.26M USD630.66M USD1.24B USD1.22B USD1.18B USD1.14B USD1.19B USD6.77B USD
Free Cash Flow9.80B USD9.35B USD9.39B USD9.39B USD9.40B USD9.31B USD9.84B USD10.36B USD10.87B USD11.23B USD6.22B USD
Terminal Value--------------------147.27B USD
Present Value9.33B USD8.48B USD8.11B USD7.73B USD7.37B USD6.90B USD6.85B USD6.72B USD6.52B USD6.19B USD—
EFFICIENCY
ROIC 20.14% 19.14% 19.09% 18.96% 18.74% 19.50% 19.98% 20.40% 20.77% 21.08% 8.83%
Cost of Capital 4.98% 4.98% 4.98% 4.98% 4.98% 5.75% 6.52% 7.29% 8.06% 8.83% 8.83%
Sales/Capital 3.60x 3.60x 3.60x 3.60x 3.60x 1.80x 1.80x 1.80x 1.80x 1.80x —

Profitability & Efficiency

Operating Margin (%)
ROIC (%)

Value Creation Analysis

ROIC (%)
Cost of Capital (%)

Operational Cash Flow Analysis

Free Cash Flow ($B)
Reinvestment ($B)