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ONE Gas (OGS)
NYSE:OGS
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ONE Gas (OGS) AI Stock Analysis

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OGS

ONE Gas

(NYSE:OGS)

Rating:71Outperform
Price Target:
$81.00
â–²(11.07%Upside)
ONE Gas shows strong financial performance and positive earnings call sentiment, which are significant strengths. While technical analysis and valuation indicate a stable but fairly valued stock, corporate events add strategic growth potential. However, high leverage and negative free cash flow pose risks that could impact future stability.
Positive Factors
Economic Growth
The company benefits from economic growth across their service territories, with residential growth being a strong avenue for margin expansion.
Financial Strategy
With strategic financial planning, OGS has addressed long-term capital needs, mitigating risks and ensuring strategic flexibility.
Negative Factors
Interest Expenses
Higher interest expense is expected due to maturing lower-cost debt, which impacts short-term earnings estimates.
Investor Sentiment
Despite the positive outlook, OGS has had little traction with investors and is currently a Consensus Hold on the sell-side.

ONE Gas (OGS) vs. SPDR S&P 500 ETF (SPY)

ONE Gas Business Overview & Revenue Model

Company DescriptionONE Gas, Inc., together with its subsidiaries, operates as a regulated natural gas distribution utility company in the United States. The company operates through three divisions: Oklahoma Natural Gas, Kansas Gas Service, and Texas Gas Service. It provides natural gas distribution services to 2.2 million customers in three states. It serves residential, commercial, and transportation customers. As of December 31, 2021, it operated approximately 41,600 miles of distribution mains; and 2,400 miles of transmission pipelines, as well as had 51.4 billion cubic feet of natural gas storage capacity. ONE Gas, Inc. was founded in 1906 and is headquartered in Tulsa, Oklahoma.
How the Company Makes MoneyONE Gas makes money through its regulated natural gas distribution services. The company's primary revenue stream comes from the sale and delivery of natural gas to its residential, commercial, industrial, and transportation customers. As a regulated utility, ONE Gas's rates and services are subject to approval by state regulatory commissions, which ensures the company can recover its costs and earn a reasonable return on its investments. Additionally, the company may engage in infrastructure development and maintenance projects, which can also be factored into its rate base, contributing to its revenue. The company's earnings are influenced by factors such as customer growth, rate adjustments, regulatory approvals, and operational efficiencies. Significant partnerships with state regulatory bodies and local communities also play a role in sustaining and enhancing its revenue streams.

ONE Gas Earnings Call Summary

Earnings Call Date:May 05, 2025
(Q1-2025)
|
% Change Since: -5.96%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance driven by new rates, customer growth, and operational excellence, including a significant safety award and regulatory successes. However, there were challenges such as increased O&M expenses, decreased other income, and higher interest expenses. The positive aspects slightly outweigh the negatives, showing a generally robust quarter.
Q1-2025 Updates
Positive Updates
Strong Financial Performance
Reported net income of $119 million or $1.98 per diluted share, compared to $99.3 million or $1.75 in the same period last year.
Revenue and Customer Growth
First quarter revenues increased by approximately $52 million from new rates and $2 million from continued customer growth.
Operational Excellence and Safety Recognition
Received the American Gas Association Safety Award for the lowest rate of significant injuries among peers for the eighth consecutive year.
Successful Regulatory Filings
Filed performance-based rate change applications and completed annual capital recovery filings in several regions.
Innovative Projects and Emission Reductions
Progressed on the Austin System Reinforcement Project and achieved a 51% reduction in leak-related emissions.
Negative Updates
Increased O&M Expenses
First quarter O&M expenses were approximately 2% higher than the first quarter last year, with a projected 4% CAGR over the five-year plan.
Decreased Other Income
Other income net decreased by just under $3 million compared to the same period last year, primarily due to decreases in the market value of investments.
Higher Interest Expenses
Interest expense in the first quarter was $4.7 million higher than the same period in 2024, reflecting the maturity of lower coupon notes and higher average commercial paper balances.
Company Guidance
In the recent ONE Gas First Quarter Earnings Conference Call, the company reported strong financial results, with a net income of $119 million, or $1.98 per diluted share, driven by new rates and efficient management of O&M expenses. The company anticipates reaching the upper half of its guidance ranges, with net income projected between $254 million to $261 million and earnings per diluted share from $4.20 to $4.32. Weather conditions were 5% colder than normal, contributing to a 16% increase in customer demand compared to the previous year. Revenues increased by approximately $52 million from new rates and $2 million from customer growth, while O&M expenses rose by 2% compared to the first quarter of the previous year. The company maintained a 4% CAGR for O&M expenses across its five-year plan. Notably, ONE Gas has made progress on its emissions goals, achieving a 51% reduction in leak-related emissions and continuing to support customer growth with strategic capital investments.

ONE Gas Financial Statement Overview

Summary
ONE Gas demonstrates solid financial health with strong profitability and a stable balance sheet. The company is on a positive growth trajectory, with increasing revenues and profitability margins. However, the high leverage and negative free cash flow highlight potential risks that need to be addressed to ensure long-term financial stability.
Income Statement
75
Positive
ONE Gas shows a solid financial performance with a consistent increase in gross profit margin and net profit margin over the years. The TTM data indicates a gross profit margin of 48.67% and a net profit margin of 10.75%, both of which are strong indicators of profitability. The revenue growth rate from the previous annual report to TTM is 8.48%, suggesting a positive growth trajectory. However, the EBIT margin has slightly decreased from 19.14% to 19.18% in the TTM, indicating stable operational efficiency.
Balance Sheet
70
Positive
The balance sheet reflects a stable financial position with a debt-to-equity ratio of 1.01 in the TTM, which is manageable but indicates a moderate level of leverage. The return on equity (ROE) is 7.63%, showing a reasonable return on shareholders' investments. The equity ratio stands at 38.24%, suggesting a balanced capital structure. However, the company's high debt levels could pose a risk if not managed effectively.
Cash Flow
65
Positive
Cash flow analysis reveals challenges with free cash flow, which is negative in the TTM at -$161.64 million, although it has improved from the previous year. The operating cash flow to net income ratio is 2.21, indicating strong cash generation relative to net income. However, the negative free cash flow to net income ratio suggests that capital expenditures are significantly impacting cash reserves, which could be a concern if this trend continues.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue2.08B2.37B2.58B1.81B1.53B
Gross Profit775.11M729.08M646.65M583.91M561.71M
EBITDA703.17M666.90M574.25M514.28M493.33M
Net Income222.85M231.23M221.74M206.43M196.41M
Balance Sheet
Total Assets8.43B7.77B7.78B8.40B6.03B
Cash, Cash Equivalents and Short-Term Investments57.99M18.84M9.68M8.85M7.99M
Total Debt3.33B3.07B3.23B4.18B2.00B
Total Liabilities5.32B5.01B5.19B6.05B3.80B
Stockholders Equity3.10B2.77B2.58B2.35B2.23B
Cash Flow
Free Cash Flow-334.75M272.90M961.36M-2.03B-106.84M
Operating Cash Flow368.41M939.53M1.57B-1.54B364.50M
Investing Cash Flow-707.50M-669.64M-614.11M-501.08M-470.37M
Financing Cash Flow378.23M-248.63M-947.46M2.04B96.01M

ONE Gas Technical Analysis

Technical Analysis Sentiment
Negative
Last Price72.93
Price Trends
50DMA
73.41
Negative
100DMA
74.21
Negative
200DMA
72.48
Positive
Market Momentum
MACD
0.10
Negative
RSI
48.01
Neutral
STOCH
42.51
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OGS, the sentiment is Negative. The current price of 72.93 is below the 20-day moving average (MA) of 73.03, below the 50-day MA of 73.41, and above the 200-day MA of 72.48, indicating a neutral trend. The MACD of 0.10 indicates Negative momentum. The RSI at 48.01 is Neutral, neither overbought nor oversold. The STOCH value of 42.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OGS.

ONE Gas Risk Analysis

ONE Gas disclosed 15 risk factors in its most recent earnings report. ONE Gas reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

ONE Gas Peers Comparison

Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
$2.83B22.469.04%2.14%20.41%13.64%
76
Outperform
$4.61B11.1217.83%3.92%20.30%63.69%
72
Outperform
$4.53B18.897.30%4.05%-7.10%2.54%
71
Outperform
$1.65B16.437.36%4.79%3.88%11.80%
71
Outperform
$4.38B17.648.08%3.65%7.73%2.36%
68
Neutral
$5.64B25.136.49%3.16%-10.78%16.27%
67
Neutral
$16.87B17.024.48%3.26%4.72%5.95%
* Utilities Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
OGS
ONE Gas
72.93
4.98
7.33%
CPK
Chesapeake Utilities
121.56
4.60
3.93%
SR
Spire
76.41
11.53
17.77%
NJR
New Jersey Resources
45.96
0.73
1.61%
NWN
Northwest Gas
40.86
2.05
5.28%
SWX
Southwest Gas
78.42
5.09
6.94%

ONE Gas Corporate Events

Financial Disclosures
ONE Gas to Release Q2 2025 Financial Results
Neutral
Jul 2, 2025

On July 2, 2025, ONE Gas announced it will release its second quarter 2025 financial results on August 5, 2025, after market close. The company will host a conference call the following day, August 6, 2025, to discuss the results, which will be accessible via their website. This announcement is part of ONE Gas’s ongoing efforts to maintain transparency with stakeholders and provide timely updates on its financial performance.

The most recent analyst rating on (OGS) stock is a Buy with a $80.00 price target. To see the full list of analyst forecasts on ONE Gas stock, see the OGS Stock Forecast page.

Executive/Board Changes
ONE Gas Announces Senior Leadership Transition
Neutral
Jul 1, 2025

On July 1, 2025, ONE Gas announced the retirement of Joseph L. McCormick, its senior vice president, general counsel, and assistant secretary, effective October 1, 2025. Regina L. Gregory will succeed him, initially serving as a senior advisor from July 16, 2025, before assuming McCormick’s roles upon his retirement. McCormick has been a pivotal figure in the company for over 20 years, significantly influencing its legal and strategic direction. Gregory, with extensive experience in legal and corporate leadership, is expected to maintain the company’s high standards and contribute strategically to its future.

The most recent analyst rating on (OGS) stock is a Buy with a $80.00 price target. To see the full list of analyst forecasts on ONE Gas stock, see the OGS Stock Forecast page.

Business Operations and Strategy
ONE Gas to Participate in European Investment Forums
Neutral
Jun 9, 2025

ONE Gas announced on June 9, 2025, that it will participate in the American Gas Association and Jefferies Europe Mini-Forum on June 16-17, 2025, in London and Zurich. The company’s executives, including the CEO and CFO, will engage with the investment community, potentially enhancing the company’s visibility and investor relations.

The most recent analyst rating on (OGS) stock is a Buy with a $80.00 price target. To see the full list of analyst forecasts on ONE Gas stock, see the OGS Stock Forecast page.

Business Operations and Strategy
ONE Gas to Present at Mizuho Mid-Cap Conference
Neutral
Jun 3, 2025

On June 3, 2025, ONE Gas announced its participation in the Mizuho Mid-Cap Utilities Conference in New York City on June 5, 2025. The company’s executives, including the CEO and CFO, will engage with the investment community, highlighting ONE Gas’s strategic positioning and possibly impacting investor perceptions and stakeholder interests.

The most recent analyst rating on (OGS) stock is a Buy with a $80.00 price target. To see the full list of analyst forecasts on ONE Gas stock, see the OGS Stock Forecast page.

Executive/Board ChangesShareholder Meetings
ONE Gas Announces Key Decisions at Shareholder Meeting
Neutral
May 28, 2025

ONE Gas held its annual shareholder meeting on May 22, 2025, where several key decisions were made. The election of directors resulted in the appointment of nine individuals to serve one-year terms, and the appointment of PricewaterhouseCoopers LLP as the independent auditor for the fiscal year ending December 31, 2025, was ratified. Additionally, the advisory vote on executive compensation was approved by a majority of the shareholders.

The most recent analyst rating on (OGS) stock is a Buy with a $80.00 price target. To see the full list of analyst forecasts on ONE Gas stock, see the OGS Stock Forecast page.

Private Placements and FinancingBusiness Operations and Strategy
ONE Gas Enters Forward Sale Agreement with JPMorgan
Positive
May 12, 2025

On May 8, 2025, ONE Gas, Inc. entered into a forward sale agreement with JPMorgan Chase Bank for 2,500,000 shares of its common stock, with settlement expected by December 31, 2026. Additionally, the company signed an underwriting agreement with J.P. Morgan Securities LLC for a public offering of the same number of shares, with an option for an additional 375,000 shares, marking a strategic move to enhance its financial flexibility and market presence.

The most recent analyst rating on (OGS) stock is a Buy with a $80.00 price target. To see the full list of analyst forecasts on ONE Gas stock, see the OGS Stock Forecast page.

Private Placements and FinancingBusiness Operations and Strategy
ONE Gas Announces Public Offering of Common Stock
Neutral
May 8, 2025

On May 8, 2025, ONE Gas, Inc. announced its plan to conduct a public offering of 2,500,000 shares of its common stock. The company intends to enter into a forward sale agreement with JPMorgan Chase Bank and grant an option to purchase an additional 375,000 shares. This move is expected to provide financial flexibility for general corporate purposes, including debt repayment and investments, potentially impacting its market positioning and stakeholder interests.

DividendsBusiness Operations and StrategyFinancial DisclosuresRegulatory Filings and Compliance
ONE Gas Reports Strong Q1 2025 Financial Results
Positive
May 5, 2025

On May 5, 2025, ONE Gas announced its first quarter financial results, reporting a net income of $119.4 million, an increase from the previous year. The company expects to achieve the upper half of its 2025 financial guidance and declared a quarterly dividend of 67 cents per share, payable on June 3, 2025. Despite colder weather, the impact on income was mitigated by regulatory mechanisms. The company also highlighted ongoing regulatory activities, including rate increase requests in Kansas, Oklahoma, and Texas, and plans for significant capital investments in system integrity and expansion projects.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 25, 2025