MCD
McDonald's
Dividend / Cash flow
Price today
$263.96
what the market pays
Worth
$65.65
calculated cycle value
Price is 302% above its value
charlieapp.co
Price vs Intrinsic Value
The line is the price month by month; the green band marks when it's undervalued (−20% off value). When the price drops in there, the discount is real, not opinion.
Where does the value come from?
Established business paying dividends
McDonald's · McCafé · Delivery
$120.37
per share
How it's calculated
Pure franchise 95%+ — deliberate structural debt. IV FCF floor $66 (market EV/FCF: 37.9x vs IV 12x). Market pays for 40k restaurants + local monopoly. GLP-1 drugs = long-term volume risk. BARGAIN model <$53.
Net cash in the bank
cash minus financial debt, per share
Total calculated value
business + cash
How many times the cash flow
Dividend / Cash flow · vs 42 peers
You pay 31.8x times this business's cash flow; its sector median is 25.7x.
62% above what Charlie thinks it's worth (12x) — you're overpaying, sector or no sector.
Why Overvalued?
Its free cash flow is $10.03/share × 12.0x multiplier minus $54.72 in negative net cash = $65.65 in intrinsic value. Today's price of $263.96 is 75% above the calculated value — the market is paying a premium over what the model sees as fair.
The price is 302% above the calculated value. You're paying more than it's worth.
Buying here lowers your expected return and wipes out the safety margin.
The next reasonable entry zone starts at $62.37.
At what price would buying make sense?
Entry zones
🟢 Undervalued
≤$52.52
-20% off Value
🟡 Discounted
≤$62.37
-5% off Value
🔴 Today
$263.96
-75% Valor
Overvalued
The market prices it too high versus what the business makes. Patience pays off here.
“Time is the friend of the wonderful company, the enemy of the mediocre.”
— Warren Buffett
Model updated · July 2026
The business
McDonald's doesn't sell burgers: it's a landlord dressed up as a clown.
McDonald's operates 43,000 burger joints globally, but 95%+ are franchises. It collects royalties (~5% of sales) and real estate rent from its franchisees. The real business is being the biggest landlord in fast food.
Location density impossible to replicate and a franchise economy where McDonald's owns the land. The brand lets it charge above-market rents to operators who still make money. Not a monopoly, it's scale with a real estate toll.
Revenue history
From $23.2B to $26.9B in 4 years. The business grows steadily.
Where each $100 of sales goes
Revenue $26.9B · FY2025
Of every $100 in sales, $68 goes to costs and operations; $32 is left as net profit (32% margin).
Catalysts and risks
Plan to open 50,000 restaurants by 2027 (vs ~43,000 today).
Dividend growing 48 years straight, current payout ~$7.7B annually.
Traffic recovery in the U.S. after value menu launched in 2024.
GLP-1 (Ozempic) structurally reduces appetite in Western consumers.
Net debt of $39B with high rates squeezes future FCF.
Market pays 38x EV/FCF for a business growing 4% — fragile multiple.
Charlie's note
“A landlord dressed up as a burger joint. Excellent business, fantasy price: paying 38x to grow 4% is math for optimists.”
Analysis · May 2026
So when would be a good price for McDonald's?
By our calculation, not yet. We will email you the day it drops to $62.37 — so you do not have to keep checking.
🔔 Email meFree · no card
Charlie informs, it doesn't advise. No information should be taken as a recommendation to buy or sell.