McDonald's (MCD) closed out FY 2025 with Q4 revenue of US$7.0b and basic EPS of US$3.03, while trailing 12 month revenue reached US$26.9b and EPS came in at US$12.00. Over recent periods the company has seen quarterly revenue move from US$6.4b in Q4 2024 to US$7.1b in Q3 2025 before Q4’s US$7.0b, alongside quarterly EPS ranging between US$2.80 and just over US$3.19. With trailing net income of US$8.6b and margins reported in the low 30% range, investors are looking at a business that is pairing solid scale with consistent profitability.

See our full analysis for McDonald's.

With the headline numbers on the table, the next step is to see how this earnings profile lines up with the key bullish and bearish narratives investors are using to frame McDonald's today.

Margins Hold Near 32% While Sales Tick Up

• Over the last 12 months, McDonald's generated US$26.9b in revenue and US$8.6b in net income, which works out to a 31.9% net margin, slightly above the prior year's 31.7%.
• Consensus narrative expects tech and an asset light model to keep supporting margins, and the current figures partly line up with that:
  • Net margin staying close to 32% alongside trailing EPS of US$12.00 suggests profitability is holding up even as the restaurant count grows from 43,477 to 45,356 over the period.
  • At the same time, quarterly same restaurant sales growth swung from a 1% decline in Q1 2025 to gains of 3.8% and 3.6% in Q2 and Q3, which is consistent with the consensus view that menu tweaks and digital ordering can help support revenue and profit per store.

Store Growth and Same Store Trends Send Mixed Signals

• Total restaurants increased from 42,819 in Q3 2024 to 45,356 on a trailing 12 month basis in Q4 2025, while same restaurant sales growth moved from a 1.5% decline in Q3 2024 to 3.1% growth over the latest 12 months.
• Bears focus on traffic pressure and market saturation, and parts of the recent data back those worries:
  • Same restaurant sales slipped 1% in Q1 2025 even as the store base climbed to 43,756. This fits the concern that adding units does not automatically translate into higher like for like demand.
  • Consensus narrative also flags competition and lower income guest weakness, and the uneven path from same restaurant sales declines in late 2024 to mid single digit growth in 2025 leaves room for that cautious view to stick.

Skeptics watching these swings in same restaurant sales may want to see how the detailed bear case frames traffic risks and new unit growth together before deciding how much weight to put on this concern. 🐻 McDonald's Bear Case

Mixed Valuation Signals Around Earnings Growth

• The stock trades at US$284.10 with a P/E of 23.6x, compared with a 23.6x multiple on trailing EPS of US$12.00, an analyst consensus target of US$344.55, DCF fair value of US$250.59, and a 2.62% dividend yield.
• Consensus narrative leans bullish on long term earnings growth, yet the current numbers show both support and friction for that view:
  • Earnings grew 8.3% per year over the past five years, but the most recent year only saw 4.1% growth, so the track record is solid while the latest pace is slower than that history.
  • Analysts still see room for upside from US$284.10 to US$344.55 and point to ongoing cash generation, but a DCF fair value below the market price and a P/E above the broader US Hospitality industry average of 20.6x highlight why some investors may question how much growth is already reflected.

For anyone trying to balance that slower recent earnings growth with the premium P/E and upside implied by analyst targets, it can help to see how bullish investors connect McDonald's margin profile and expansion plans to those expectations. 🐂 McDonald's Bull Case

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for McDonald's on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

Given the mix of positives and concerns throughout this earnings story, it makes sense to check the details yourself and decide where you stand. To see how the current upside and downside signals stack up in one place, review the 4 key rewards and 2 important warning signs

See What Else Is Out There

McDonald's mix of slower recent earnings growth, uneven same restaurant sales and a P/E above the Hospitality average may leave you questioning the stock's value.

If you are concerned that paying a premium for mixed growth and traffic trends could cap your upside, compare that profile with companies in the 44 high quality undervalued stocks.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.