Atmos Energy (ATO) AI Stock Analysis

• Market Cap: $24.49B
• Dividend Yield: 2.26%
• Average Volume (3M): 843.27K
• Price to Earnings (P/E): 21.5
• Beta (1Y): 0.28
• Revenue Growth: 10.60%
• EPS Growth: 8.55%
• Country: US
• Employees: 5,260
• Sector: Utilities
• Sector Strength: 72
• Industry: Regulated Gas
• EPS (TTM): 3.03
• Shares Outstanding: 158,836,870
• 10 Day Avg. Volume: 602,045
• 30 Day Avg. Volume: 843,272
• PEG Ratio: 7.68
• Price to Book (P/B): 1.88
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -18.91
• Enterprise Value/Market Cap: 1.33
• Enterprise Value/Revenue: 1.93
• Enterprise Value/Gross Profit: 13.37
• Enterprise Value/Ebitda: 3.80
• 1Y Price Target: $165.75
• Price Target Upside: 7.50% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

• Rating: 72 Outperform
• Price Target: $170.00 ▲(10.25%Upside)

Atmos Energy's overall stock score is primarily driven by strong financial performance and favorable earnings guidance. However, the negative free cash flow and mixed technical signals slightly offset these strengths. The company's strategic financial maneuvers bolster its position, but cautious cash flow management is crucial for future growth.

Positive Factors

Financial Performance

ATO reported FY24 EPS of $6.83/sh, beating Mizuho and consensus estimates and topping the high-end of guidance range.

Growth Potential

ATO's five-year capex update represented a +41% increase from the prior plan, indicating strong future growth potential.

Regulatory Environment

The Gas Reliability Infrastructure Program in Texas allows Atmos Energy to convert a large portion of capital expenditures to earnings rapidly, supporting robust rate base growth.

Negative Factors

Credit Rating

There is an anticipated downgrade in Atmos Energy's credit rating due to financial trends and changes in tax status.

Financial Risk

Considerable dependence on external equity could be a risk in case of a market downturn and lead to more EPS dilution.

Inflation Concerns

ATO forecasts an ~8-9% CAGR in customer bills, above historical inflation levels, which could be a risk if gas prices spike as it could crowd investment headroom and cause regulatory backlash.

Atmos Energy Business Overview & Revenue Model

Company Description

Atmos Energy Corporation, together with its subsidiaries, engages in the regulated natural gas distribution, and pipeline and storage businesses in the United States. It operates through two segments, Distribution, and Pipeline and Storage. The Distribution segment is involved in the regulated natural gas distribution and related sales operations in eight states. This segment distributes natural gas to approximately three million residential, commercial, public authority, and industrial customers. As of September 30, 2021, it owned 71,921 miles of underground distribution and transmission mains. The Pipeline and Storage segment engages in the pipeline and storage operations. This segment transports natural gas for third parties and manages five underground storage reservoirs in Texas; and provides ancillary services to the pipeline industry, including parking arrangements, lending, and inventory sales. As of September 30, 2021, it owned 5,699 miles of gas transmission lines. Atmos Energy Corporation was founded in 1906 and is headquartered in Dallas, Texas.

How the Company Makes Money

Atmos Energy makes money primarily through its regulated natural gas distribution and pipeline operations. The company's revenue model is centered around the sale and delivery of natural gas to its customers, with the majority of its earnings derived from regulated utility operations. Atmos Energy charges its customers for the natural gas supply, delivery, and associated services, which are subject to state and local regulatory oversight. This regulatory framework allows the company to earn a return on its investments in infrastructure and operations, ensuring a stable revenue stream. Additionally, the company benefits from cost recovery mechanisms that enable it to recover expenses incurred in maintaining and upgrading its infrastructure. Atmos Energy's revenue is largely stable and predictable due to the regulated nature of its business, with earnings supported by a growing customer base and ongoing infrastructure investments.

Atmos Energy Financial Statement Overview

Summary

Atmos Energy exhibits strong revenue and profit growth, supported by efficient operations and a stable financial position. However, the negative free cash flow due to high capital expenditures suggests a need for improved cash generation to sustain growth.

Income Statement

Atmos Energy has shown robust revenue growth, with the most recent TTM (Trailing-Twelve-Months) revenue up 7.7% from the previous year. The company maintains a strong Gross Profit Margin of 54.4% and a healthy Net Profit Margin of 25.3%. The EBIT and EBITDA margins are also solid at 33.3% and 50.9%, respectively, indicating strong operational efficiency. Overall, the income statement reflects both growth and profitability.

Balance Sheet

The balance sheet shows a moderate Debt-to-Equity Ratio of 0.65, indicating a balanced approach to leveraging. The Return on Equity (ROE) is strong at 8.7%, reflecting efficient use of shareholder funds. The Equity Ratio of 48.7% demonstrates a healthy proportion of equity financing relative to total assets. The company's financial position appears stable with manageable leverage.

Cash Flow

Operating cash flow has grown to $1.95 billion, although free cash flow remains negative at -$1.31 billion due to significant capital expenditures. The Free Cash Flow to Net Income Ratio is not favorable, suggesting a need for improved cash generation relative to earnings. The Operating Cash Flow to Net Income Ratio is 1.71, indicating good cash generation capabilities despite the high capital expenditure outlays.

Breakdown	TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement
Total Revenue	4.49B	4.17B	4.28B	4.20B	3.41B	2.82B
Gross Profit	2.44B	2.41B	2.06B	2.52B	2.37B	2.16B
EBITDA	2.28B	2.10B	1.74B	1.49B	1.38B	1.26B
Net Income	1.14B	1.04B	885.32M	774.40M	665.56M	601.44M
Balance Sheet
Total Assets	26.98B	25.19B	22.52B	22.19B	19.61B	15.36B
Cash, Cash Equivalents and Short-Term Investments	543.50M	307.34M	15.40M	51.55M	116.72M	20.81M
Total Debt	8.51B	8.13B	7.04B	8.15B	7.33B	4.53B
Total Liabilities	13.84B	13.04B	11.65B	12.77B	11.70B	8.57B
Stockholders Equity	13.14B	12.16B	10.87B	9.42B	7.91B	6.79B
Cash Flow
Free Cash Flow	-1.31B	-1.20B	653.77M	-1.47B	-3.05B	-897.68M
Operating Cash Flow	1.95B	1.73B	3.46B	977.58M	-1.08B	1.04B
Investing Cash Flow	-3.23B	-2.92B	-2.80B	-2.43B	-1.96B	-1.93B
Financing Cash Flow	1.57B	1.48B	-696.77M	1.39B	3.14B	883.78M

Atmos Energy Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 154.19
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ATO, the sentiment is Positive. The current price of 154.19 is above the 20-day moving average (MA) of 153.38, below the 50-day MA of 154.84, and above the 200-day MA of 146.48, indicating a bullish trend. The MACD of -0.04 indicates Negative momentum. The RSI at 56.23 is Neutral, neither overbought nor oversold. The STOCH value of 76.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ATO.

Atmos Energy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
UGI	76 Outperform	$7.63B	14.65	10.84%	4.21%	-4.30%	―
NJR	76 Outperform	$4.59B	11.08	17.83%	3.94%	20.30%	63.69%
ATO	72 Outperform	$24.49B	21.52	9.18%	2.26%	10.60%	8.55%
SR	72 Outperform	$4.39B	18.37	7.30%	4.22%	-7.10%	2.54%
NI	71 Outperform	$18.63B	21.32	10.34%	2.83%	13.08%	17.47%
SWX	68 Neutral	$5.54B	24.70	6.49%	3.22%	-10.78%	16.27%
Sector *	59 Neutral	3.84B	18.35	-19.84%	1.16%	13.25%	41.47%

Atmos Energy Corporate Events

Atmos Energy Completes $500 Million Senior Notes Offering

On June 26, 2025, Atmos Energy completed a public offering of $500 million in 5.200% Senior Notes due 2035, raising approximately $493.5 million after expenses. This move strengthens Atmos Energy’s financial position, allowing flexibility in managing its debt obligations and supporting strategic initiatives, while the restrictive covenants and potential events of default outlined in the Indenture provide a structured framework for financial governance.

The most recent analyst rating on (ATO) stock is a Buy with a $159.00 price target. To see the full list of analyst forecasts on Atmos Energy stock, see the ATO Stock Forecast page.

Atmos Energy Announces $500M Senior Notes Offering

On June 16, 2025, Atmos Energy Corporation announced an underwriting agreement for a $500 million public offering of 5.200% Senior Notes due 2035. The offering, registered under the Securities Act of 1933, is expected to close on June 26, 2025, with net proceeds of approximately $493.5 million, which will impact the company’s financial operations and potentially strengthen its market position.

The most recent analyst rating on (ATO) stock is a Buy with a $159.00 price target. To see the full list of analyst forecasts on Atmos Energy stock, see the ATO Stock Forecast page.