Atmos Energy (ATO) AI Stock Analysis

• Market Cap: $26.65B
• Dividend Yield: 2.09%
• Average Volume (3M): 880.94K
• Price to Earnings (P/E): 22.9
• Beta (1Y): 0.28
• Revenue Growth: 12.90%
• EPS Growth: 7.70%
• Country: US
• Employees: 5,260
• Sector: Utilities
• Sector Strength: 72
• Industry: Regulated Gas
• EPS (TTM): 1.16
• Shares Outstanding: 160,523,570
• 10 Day Avg. Volume: 867,781
• 30 Day Avg. Volume: 880,937
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.24
• Enterprise Value/Revenue: 7.16
• Enterprise Value/Gross Profit: 13.29
• Enterprise Value/Ebitda: 14.23
• 1Y Price Target: $165.83
• Price Target Upside: 0.24% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 79 Outperform
• Price Target: $188.00 ▲(13.64% Upside)

Atmos Energy's overall stock score is driven by strong financial performance and positive earnings call sentiment. The company's robust technical indicators and strategic financial moves further support its position. However, concerns about cash flow management and moderate valuation temper the score.

Positive Factors

Earnings

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.

Market Confidence

The 7.4% growth guidance for FY25 speaks to management's confidence in its asset base and anticipated benefits from the Waha spread.

Negative Factors

Financial Burden

ATO increased its financing budget by 50% to support the new capex outlook, which could cause concerns about additional financial burden.

Financial Risk

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

Regulatory Risk

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 is one of the largest natural gas distribution companies in the United States, serving over three million customers across several states, primarily in the southern and midwestern regions. The company is involved in the distribution of natural gas through its extensive pipeline network, and it also engages in storage and transportation activities. Atmos Energy focuses on providing reliable, affordable natural gas service while emphasizing safety, efficiency, and environmental stewardship.

How the Company Makes Money

Atmos Energy generates revenue primarily through the distribution of natural gas to residential, commercial, and industrial customers. The company earns money by charging customers for the natural gas they consume, as well as for the delivery of that gas. Revenue is derived from regulated rates set by state utility commissions, which allows Atmos Energy to recover its costs and earn a return on its investments in infrastructure. Key revenue streams include base rates, which cover the cost of gas delivery, and additional charges for services such as storage and transportation. Atmos Energy also benefits from partnerships with suppliers and other stakeholders in the energy sector, which can enhance its operational efficiency and expand its service offerings. Additionally, the company may experience revenue growth through infrastructure investments and expansion into new markets.

Atmos Energy Financial Statement Overview

Summary

Atmos Energy demonstrates strong revenue and profit growth with robust operational efficiency. The income statement and balance sheet are solid, though cash flow management needs improvement due to high capital expenditures.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.62B	4.17B	4.28B	4.20B	3.41B	2.82B
Gross Profit	2.49B	2.41B	2.06B	1.81B	1.70B	1.53B
EBITDA	2.33B	2.10B	1.74B	1.49B	1.38B	1.26B
Net Income	1.16B	1.04B	885.32M	774.40M	665.56M	601.44M
Balance Sheet
Total Assets	27.71B	25.19B	22.52B	22.19B	19.61B	15.36B
Cash, Cash Equivalents and Short-Term Investments	713.60M	307.34M	15.40M	51.55M	116.72M	20.81M
Total Debt	9.00B	8.13B	7.12B	8.37B	7.56B	4.77B
Total Liabilities	14.33B	13.04B	11.65B	12.77B	11.70B	8.57B
Stockholders Equity	13.39B	12.16B	10.87B	9.42B	7.91B	6.79B
Cash Flow
Free Cash Flow	-1.37B	-1.20B	653.77M	-1.47B	-3.05B	-897.68M
Operating Cash Flow	2.03B	1.73B	3.46B	977.58M	-1.08B	1.04B
Investing Cash Flow	-3.40B	-2.92B	-2.80B	-2.43B	-1.96B	-1.93B
Financing Cash Flow	1.40B	1.48B	-696.77M	1.39B	3.14B	883.78M

Atmos Energy Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 165.43
• 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 165.43 is above the 20-day moving average (MA) of 162.77, above the 50-day MA of 157.41, and above the 200-day MA of 149.47, indicating a bullish trend. The MACD of 2.71 indicates Negative momentum. The RSI at 64.38 is Neutral, neither overbought nor oversold. The STOCH value of 41.91 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
ATO	79 Outperform	$26.65B	22.93	9.05%	2.09%	12.90%	7.70%
NJR	77 Outperform	$4.73B	11.59	18.03%	3.82%	21.88%	71.35%
UGI	72 Outperform	$7.48B	18.35	8.75%	4.33%	-0.52%	-39.42%
NI	70 Neutral	$19.95B	22.52	10.56%	2.62%	16.98%	12.45%
OGS	68 Neutral	$4.52B	17.97	8.24%	3.50%	13.43%	6.49%
Sector *	67 Neutral	$17.59B	18.19	5.33%	3.63%	7.33%	12.21%
SWX	65 Neutral	$5.58B	28.86	5.41%	3.19%	-10.07%	5.98%

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.

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.