Atmos Energy (ATO) AI Stock Analysis

• Market Cap: $30.11B
• Dividend Yield: 2.15%
• Average Volume (3M): 1.53M
• Price to Earnings (P/E): 23.7
• Beta (1Y): 0.13
• Revenue Growth: 12.91%
• EPS Growth: 9.86%
• Country: US
• Employees: 5,260
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Gas
• EPS (TTM): 2.44
• Shares Outstanding: 165,438,950
• 10 Day Avg. Volume: 1,093,135
• 30 Day Avg. Volume: 1,525,310
• PEG Ratio: 2.18
• Price to Book (P/B): 2.00
• Price to Sales (P/S): 5.77
• P/FCF Ratio: -17.95
• Enterprise Value/Market Cap: 1.31
• Enterprise Value/Revenue: 8.09
• Enterprise Value/Gross Profit: 15.48
• Enterprise Value/Ebitda: 16.21
• 1Y Price Target: $180.71
• Price Target Upside: -0.74% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 7
• EPS Forecast (FY): 8.26
• Revenue Forecast (FY): $5.28B

• Rating: 67 Neutral
• Price Target: $186.00 ▲(2.16% Upside)
• Action: Reiterated Date: 02/11/26
• Date: Action: Reiterated 02/11/26

The score is driven primarily by solid profitability and improving earnings, tempered by sustained negative free cash flow that increases reliance on external financing. Technicals are supportive with price above major moving averages and positive momentum. Valuation is fair-to-premium (P/E ~22) with a moderate dividend yield, while the earnings call was broadly positive on guidance and liquidity but highlighted cost and regulatory/timing uncertainties.

Positive Factors

Regulated revenue model

A regulated rate-setting model provides durable cash flow visibility and cost recovery mechanisms that support predictable revenue and returns. Over 2–6 months this underpins credit stability, capital planning and the ability to fund safety/reliability capex without relying solely on volatile commodity markets.

Strong profitability and margins

Sustained ~25% net margins reflect durable earnings power in the regulated segments. This margin buffer supports dividend capacity and internal funding for projects over the medium term, providing resilience versus modest top-line growth typical of utilities.

Robust liquidity and financing execution

Demonstrated access to capital and $4.6B liquidity reduce near-term refinancing risk and support the $4.2B FY26 capex plan. Strong financing execution and balanced capitalization provide structural flexibility to fund growth, safety projects and dividend commitments over coming quarters.

Negative Factors

Consistently negative free cash flow

Persistent negative FCF driven by heavy capex means the company must rely on external financing or equity transactions to fund its capital program. Over 2–6 months this elevates funding risk if market conditions tighten or rates rise, pressuring financial flexibility and cushion for unexpected shocks.

Regulatory uncertainty in key jurisdictions

Ongoing rate-case and legislative timing uncertainty can delay or reduce cost recovery and allowed returns. Over the medium term this creates earnings and cash-flow timing risk, complicates capital recovery assumptions, and could require more frequent filings or regulatory remedies to maintain returns.

Rising operating & maintenance costs

Higher O&M driven by compliance, leak surveys and labor raises structural operating expense levels. If regulators do not fully and timely allow recovery, persistent O&M inflation can compress margins and slow EPS/dividend growth over the next several quarters despite stable rate frameworks.

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 generates revenue primarily through the sale and distribution of natural gas to its customers. The company's revenue model is based on regulated rates set by state public utility commissions, which allow it to recover costs and earn a return on investment. Key revenue streams include residential and commercial gas sales, transportation fees for moving gas through its distribution network, and storage services. Additionally, Atmos Energy may benefit from partnerships with local governments and other agencies for infrastructure projects and energy efficiency programs, which can also enhance its earnings. Factors such as regulatory approvals, market demand for natural gas, and investments in infrastructure improvements significantly influence the company's financial performance.

Atmos Energy Financial Statement Overview

Summary

Income statement strength (high net margin and rising net income) is partially offset by weaker cash-flow quality: operating cash flow is solid, but free cash flow is persistently negative, implying ongoing external funding needs. Balance sheet leverage is manageable for a utility but not conservative.

Income Statement

Profitability is strong for a regulated utility profile, with TTM (Trailing-Twelve-Months) net margin around 25% and solid operating and EBITDA margins. Earnings have expanded versus prior years (net income rising from ~$665M in 2021 to ~$1.25B in TTM), showing improving scale and execution. The main offset is modest top-line momentum (TTM revenue growth ~3.5% and low growth in the latest annual period), consistent with a slower-growth regulated business.

Balance Sheet

Leverage looks manageable for the sector, with debt-to-equity generally in the ~0.65–0.86 range over the period, and returns on equity steady around ~8–9%, indicating consistent but not high capital efficiency. Balance sheet size has grown steadily alongside equity and assets, supporting a stable base. Key watchout is that the company is still meaningfully debt-funded (typical for utilities), which can pressure flexibility if funding costs rise or capital spending remains elevated.

Cash Flow

Operating cash generation is currently healthy (TTM operating cash flow ~$2.1B) and supports earnings quality, with operating cash flow running about 1.5x net income in TTM (Trailing-Twelve-Months). However, free cash flow is consistently negative in recent periods (TTM about -$1.6B and also negative in 2024 and 2025 annual), indicating heavy investment and/or funding needs. Cash flow has also been volatile historically (including a negative operating cash flow year in 2021), which lowers confidence despite the recent improvement.

Breakdown	TTM	Sep 2025	Sep 2024	Sep 2023	Sep 2022	Sep 2021
Income Statement
Total Revenue	4.87B	4.70B	4.17B	4.28B	4.20B	3.41B
Gross Profit	2.54B	2.46B	2.41B	2.06B	1.81B	1.70B
EBITDA	2.43B	2.38B	2.10B	1.74B	1.49B	1.38B
Net Income	1.25B	1.20B	1.04B	885.32M	774.40M	665.56M
Balance Sheet
Total Assets	29.80B	28.91B	25.19B	22.52B	22.19B	19.61B
Cash, Cash Equivalents and Short-Term Investments	371.51M	203.80M	307.34M	15.40M	51.55M	116.72M
Total Debt	9.63B	9.30B	8.13B	7.12B	8.37B	7.56B
Total Liabilities	15.52B	15.35B	13.04B	11.65B	12.77B	11.70B
Stockholders Equity	14.28B	13.56B	12.16B	10.87B	9.42B	7.91B
Cash Flow
Free Cash Flow	-1.63B	-1.51B	-1.20B	653.77M	-1.47B	-3.05B
Operating Cash Flow	2.08B	2.05B	1.73B	3.46B	977.58M	-1.08B
Investing Cash Flow	-3.71B	-3.56B	-2.92B	-2.80B	-2.43B	-1.96B
Financing Cash Flow	1.41B	1.41B	1.48B	-696.77M	1.39B	3.14B

Atmos Energy Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 182.06
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 182.06 is above the 20-day moving average (MA) of 173.74, above the 50-day MA of 169.80, and above the 200-day MA of 163.88, indicating a bullish trend. The MACD of 3.66 indicates Negative momentum. The RSI at 75.26 is Negative, neither overbought nor oversold. The STOCH value of 91.34 is Negative, 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
OGS	71 Outperform	$5.35B	19.56	8.51%	3.45%	15.06%	12.27%
SWX	70 Outperform	$6.35B	13.71	5.42%	3.07%	-23.15%	157.45%
ATO	67 Neutral	$30.11B	23.69	9.23%	2.15%	12.91%	9.86%
NI	67 Neutral	$22.21B	23.76	10.22%	2.69%	19.62%	12.87%
NJR	66 Neutral	$5.41B	16.59	13.66%	4.01%	13.94%	13.93%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
UGI	65 Neutral	$8.04B	13.82	12.52%	3.92%	1.10%	140.04%

Atmos Energy Corporate Events

Atmos Energy Shareholders Approve Charter and Governance Changes

At its February 4, 2026 annual meeting, Atmos Energy shareholders approved a series of amendments to the company’s charters in Texas and Virginia, including increasing authorized common shares to 400 million, adopting plurality voting in contested director elections, limiting certain officer liability, clarifying indemnification, and making other technical changes, all of which became effective between February 6 and February 9, 2026. The board also implemented parallel bylaw revisions effective February 4, 2026, enabling remote board and shareholder meetings, refining special meeting and voting procedures, designating U.S. federal district courts as the exclusive forum for certain securities actions, and ratified all director nominees, the 2026 auditor, and 2025 executive pay, collectively strengthening the company’s governance framework and providing additional flexibility for future corporate actions.

The meeting recorded a 92.94% quorum, with shareholders strongly supporting the charter amendments that expanded authorized share capital and modernized governance provisions, signaling broad investor alignment with management’s capital and legal structure priorities. These changes are expected to give Atmos Energy greater latitude in future financing and corporate transactions while tightening legal and procedural clarity around board authority, indemnification, and dispute resolution, which could reduce litigation uncertainty and support long-term planning for both management and investors.

The most recent analyst rating on (ATO) stock is a Hold with a $193.00 price target. To see the full list of analyst forecasts on Atmos Energy stock, see the ATO Stock Forecast page.