McDonald's Stock Price Falls to $273.75 Amid Sluggish Revenue Growth

McDonald's stock price has been in decline over the past six months, falling to $273.75 and resulting in shareholders losing 15.3% of their capital. This is a disappointing performance compared to the S&P 500, which has climbed by 11.7%. Despite this drawdown, investors may be wondering if now is the time to buy MCD.

McDonald's has been expanding its restaurant chain, with 46,028 locations in the latest quarter. The company has been opening new restaurants at a rapid clip, averaging 4.2% annual growth over the last two years. This expansion is made possible by McDonald's franchise model, where franchisees are primarily responsible for opening new restaurants while the company provides support.

One of the key advantages of McDonald's business model is its excellent free cash flow margin, which averaged 27.3% over the last two years. This allows the company to reinvest in its business, return capital to investors, and stay ahead of the competition. However, a closer look at McDonald's long-term revenue growth reveals that it has been sluggish, with sales growing at a rate of 4.2% compounded annual growth rate over the last seven years.