Common Stock Valuation Ratios (Price Multiples)
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
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McDonald’s Corp. pages available for free this week:
- Common-Size Income Statement
- Analysis of Solvency Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Price to FCFE (P/FCFE)
- Selected Financial Data since 2005
- Operating Profit Margin since 2005
- Total Asset Turnover since 2005
- Price to Sales (P/S) since 2005
- Analysis of Debt
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Current Valuation Ratios
McDonald’s Corp., current price multiples
| McDonald’s Corp. | Airbnb Inc. | Booking Holdings Inc. | Chipotle Mexican Grill Inc. | DoorDash, Inc. | Starbucks Corp. | Consumer Services | Consumer Discretionary | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||
| Current share price (P) | |||||||||||
| No. shares of common stock outstanding | |||||||||||
| Earnings per share (EPS) | |||||||||||
| Operating profit per share | |||||||||||
| Sales per share | |||||||||||
| Book value per share (BVPS) | |||||||||||
| Valuation Ratios (Price Multiples) | |||||||||||
| Price to earnings (P/E) | |||||||||||
| Price to operating profit (P/OP) | |||||||||||
| Price to sales (P/S) | |||||||||||
Based on: 10-K (reporting date: 2025-12-31).
If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.
Historical Valuation Ratios (Summary)
McDonald’s Corp., historical price multiples
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Price to earnings (P/E) | ||||||
| Price to operating profit (P/OP) | ||||||
| Price to sales (P/S) | ||||||
| Price to book value (P/BV) |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
The valuation ratios exhibit varied trends over the five-year period. Generally, the ratios suggest a relatively stable valuation, with some fluctuations observed annually. The Price to Earnings (P/E) ratio demonstrates initial growth followed by a moderation, while Price to Operating Profit (P/OP) and Price to Sales (P/S) ratios show a consistent, albeit modest, upward trajectory. Price to Book Value (P/BV) information is unavailable for the entire period.
- Price to Earnings (P/E)
- The P/E ratio increased from 24.15 in 2021 to a peak of 31.22 in 2022, indicating increased investor optimism or potentially overvaluation relative to earnings. However, the ratio subsequently decreased to 25.23 in 2023, and then stabilized, reaching 27.63 in 2025. This suggests a correction in valuation or a more moderate earnings growth expectation.
- Price to Operating Profit (P/OP)
- The P/OP ratio experienced a steady increase from 17.59 in 2021 to 19.09 in 2025. This indicates that the market price has consistently risen in relation to the company’s operating profitability. The increase, while present, is relatively contained, suggesting a measured valuation increase based on operational performance.
- Price to Sales (P/S)
- The P/S ratio demonstrates a consistent upward trend, moving from 7.85 in 2021 to 8.80 in 2025. This suggests investors are willing to pay more for each dollar of revenue generated by the company, potentially reflecting expectations of future revenue growth or improved sales efficiency. The growth is gradual, indicating a steady, rather than dramatic, shift in valuation.
- Price to Book Value (P/BV)
- Information regarding the P/BV ratio is absent for all reported years. Consequently, an assessment of the market’s valuation of the company’s net assets relative to its market capitalization is not possible based on the available information.
Overall, the observed trends suggest a company valuation that experienced a period of expansion followed by stabilization, with a consistent, moderate increase in valuation relative to operating profit and sales. The absence of P/BV data limits a complete assessment of the company’s valuation profile.
Price to Earnings (P/E)
McDonald’s Corp., historical P/E calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Net income (in millions) | ||||||
| Earnings per share (EPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/E ratio4 | ||||||
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| DoorDash, Inc. | ||||||
| Starbucks Corp. | ||||||
| P/E Ratio, Sector | ||||||
| Consumer Services | ||||||
| P/E Ratio, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 Data adjusted for splits and stock dividends.
2 2025 Calculation
EPS = Net income ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of McDonald’s Corp. Annual Report.
4 2025 Calculation
P/E ratio = Share price ÷ EPS
= ÷ =
5 Click competitor name to see calculations.
The price to earnings (P/E) ratio exhibited fluctuations over the five-year period. The share price demonstrated a consistent upward trajectory, while earnings per share (EPS) experienced more variability. These movements collectively influenced the observed P/E ratio trends.
- Share Price
- The share price increased steadily from US$245.03 in 2021 to US$333.05 in 2025, representing a cumulative increase of approximately 35.9%. The rate of increase appeared relatively consistent year-over-year.
- Earnings Per Share (EPS)
- Earnings per share decreased from US$10.15 in 2021 to US$8.44 in 2022, a decline of approximately 17%. EPS then recovered significantly to US$11.73 in 2023 before stabilizing around US$11.50 - US$12.05 for the subsequent two years. This indicates a period of earnings volatility followed by stabilization.
- Price to Earnings (P/E) Ratio
- The P/E ratio initially rose from 24.15 in 2021 to a peak of 31.22 in 2022, coinciding with the decrease in EPS. It then declined to 25.23 in 2023 as EPS increased. The ratio experienced a modest increase in 2024 to 27.00 and continued to 27.63 in 2025. The P/E ratio’s movements suggest investor sentiment was influenced by both share price appreciation and fluctuations in earnings. The ratio remained within a relatively narrow range between 25.23 and 27.63 for the final three years of the period.
The interplay between share price and EPS resulted in a dynamic P/E ratio. While the share price consistently increased, the fluctuations in EPS introduced volatility to the P/E ratio, particularly between 2021 and 2023. The stabilization of both share price and EPS in the later years contributed to a more stable P/E ratio.
Price to Operating Profit (P/OP)
McDonald’s Corp., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Operating income (in millions) | ||||||
| Operating profit per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/OP ratio4 | ||||||
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| DoorDash, Inc. | ||||||
| Starbucks Corp. | ||||||
| P/OP Ratio, Sector | ||||||
| Consumer Services | ||||||
| P/OP Ratio, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 Data adjusted for splits and stock dividends.
2 2025 Calculation
Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of McDonald’s Corp. Annual Report.
4 2025 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= ÷ =
5 Click competitor name to see calculations.
The price to operating profit (P/OP) ratio exhibited a fluctuating pattern over the five-year period. Initially, the ratio increased from 2021 to 2022, followed by a decrease in 2023, and then a slight increase through 2025. This suggests a dynamic relationship between market valuation and operating profitability.
- Share Price
- The share price demonstrated a consistent upward trend throughout the period, increasing from US$245.03 in 2021 to US$333.05 in 2025. The rate of increase appeared moderate in the earlier years, accelerating slightly in later periods.
- Operating Profit Per Share
- Operating profit per share experienced a slight decline from US$13.93 in 2021 to US$12.81 in 2022. However, it subsequently increased, reaching US$17.45 in 2025. This indicates a recovery and growth in underlying operational profitability.
- P/OP Ratio
- The P/OP ratio rose from 17.59 in 2021 to 20.58 in 2022, coinciding with the share price increase and a slight decrease in operating profit per share. A subsequent decline to 18.35 in 2023 occurred as operating profit per share increased. The ratio then stabilized, increasing marginally to 19.09 by 2025. The relative stability in the P/OP ratio from 2023 to 2025, despite continued growth in both share price and operating profit per share, suggests that market expectations regarding future operating performance remained relatively consistent during those years.
Overall, the observed trends suggest that market valuation, as reflected in the P/OP ratio, is sensitive to changes in both share price and operating profit per share. The fluctuations indicate a complex interplay between investor sentiment and fundamental business performance.
Price to Sales (P/S)
McDonald’s Corp., historical P/S calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Revenues (in millions) | ||||||
| Sales per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/S ratio4 | ||||||
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| DoorDash, Inc. | ||||||
| Starbucks Corp. | ||||||
| P/S Ratio, Sector | ||||||
| Consumer Services | ||||||
| P/S Ratio, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 Data adjusted for splits and stock dividends.
2 2025 Calculation
Sales per share = Revenues ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of McDonald’s Corp. Annual Report.
4 2025 Calculation
P/S ratio = Share price ÷ Sales per share
= ÷ =
5 Click competitor name to see calculations.
The price to sales ratio exhibits a consistent upward trend over the five-year period. Simultaneously, both the share price and sales per share demonstrate increases throughout the observed timeframe. This suggests that the market valuation of the company, relative to its sales, is increasing alongside its revenue generation at the per-share level.
- Share Price
- The share price increased from US$245.03 in 2021 to US$333.05 in 2025, representing a cumulative growth of approximately 35.9%. The rate of increase appears relatively stable year-over-year.
- Sales per Share
- Sales per share increased from US$31.23 in 2021 to US$37.84 in 2025, a cumulative increase of approximately 21.2%. The growth rate in sales per share is also relatively consistent, though slightly lower than the share price growth.
- Price to Sales Ratio (P/S)
- The P/S ratio increased from 7.85 in 2021 to 8.80 in 2025. While the increases are incremental, the consistent upward movement indicates investors are willing to pay more for each dollar of sales generated by the company. The ratio increased from 8.32 to 8.38 between 2022 and 2023, representing the smallest year-over-year change in the observed period. The largest year-over-year increase occurred between 2024 and 2025, moving from 8.56 to 8.80.
The concurrent increases in share price, sales per share, and the P/S ratio suggest a positive market perception of the company’s growth prospects and efficiency in converting sales into shareholder value. The consistent, albeit moderate, increases across all metrics indicate a stable and potentially sustainable valuation trend.
Price to Book Value (P/BV)
McDonald’s Corp., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Shareholders’ equity (deficit) (in millions) | ||||||
| Book value per share (BVPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/BV ratio4 | ||||||
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| DoorDash, Inc. | ||||||
| Starbucks Corp. | ||||||
| P/BV Ratio, Sector | ||||||
| Consumer Services | ||||||
| P/BV Ratio, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 Data adjusted for splits and stock dividends.
2 2025 Calculation
BVPS = Shareholders’ equity (deficit) ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of McDonald’s Corp. Annual Report.
4 2025 Calculation
P/BV ratio = Share price ÷ BVPS
= ÷ =
5 Click competitor name to see calculations.
The share price exhibited a consistent upward trajectory over the five-year period. Conversely, the book value per share displayed negative values throughout the observed timeframe, with fluctuations in magnitude. Consequently, the price-to-book value ratio, calculated from these figures, presents a complex pattern.
- Share Price Trend
- The share price increased from US$245.03 in 2021 to US$333.05 in 2025, representing a cumulative growth of approximately 35.9%. The year-over-year increases were generally positive, though the rate of growth appeared to moderate in later years.
- Book Value Per Share Trend
- Book value per share remained negative across all reported years. It reached its most negative value of -US$8.21 in 2022 before showing some improvement, becoming less negative in 2023, 2024, and 2025, ultimately reaching -US$2.52. This suggests a gradual, though limited, improvement in the relationship between the company’s assets and liabilities as reflected in shareholder equity.
- Price-to-Book Value (P/BV) Ratio
- Due to the consistently negative book value per share, the P/BV ratio is not meaningfully interpretable using traditional valuation frameworks. A positive share price divided by a negative book value results in a negative ratio. While the absolute value of the ratio changes over time, reflecting the movements in both share price and book value, it does not provide a standard indication of overvaluation or undervaluation. The negative sign indicates that the market capitalization exceeds the net asset value as recorded on the balance sheet.
The combination of a rising share price and negative book value per share suggests that market participants place a significant premium on factors beyond the company’s net asset value, such as future earnings potential, brand recognition, or intangible assets. Further investigation into the drivers of the negative book value and the market’s valuation of the company is warranted.