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What this page is: Delvantic's full research page for Atmos Energy Corporation (ATO) — AI-driven forensic equity research: mechanical valuation models (DCF, EPV, anchored-PE, scenario) plus three independent AI lenses (Quality / Value / Sentiment). Everything below is rendered server-side; you are not missing content that requires JavaScript. All scores are predictions and research opinions, not financial advice.
Our current read (analysis of 2026-10-07): Designation Low · Gem Score -47 (−100…+100 Quality+Value blend) · Quality -15 · Value -69 · Sentiment 28 (timing only, not weighted) · Composite fair value $101.06 vs $167.22 at analysis
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Atmos Energy Corporation
ATO NYSEAtmos Energy Corporation is a regulated natural gas utility that delivers natural gas to residential, commercial, industrial, and public authority customers across multiple U.S. states. The company operates through two core businesses: natural gas distribution and pipeline and storage, supporting the movement, balancing, and reliable delivery of gas through its network infrastructure. Atmos Energy serves millions of customers in communities across the South and central United States, with a service model centered on regulated utility operations and essential energy services. Based in Dallas, Texas, Atmos Energy plays a significant role in the U.S. natural gas market by maintaining distribution systems, transmission assets, and storage facilities that support everyday energy use and broader regional energy reliability.
Price Overview
Price History (1 Year)
Revenue & Net Income Trend
| Period | Revenue | Net Income | Net Margin | YoY/QoQ |
|---|
Key Metrics
EPS (Diluted): 7.46
Total Equity: $13.56B
Shares: 160,573,000
Total Debt: $8.92B
Cash: $202.69M
EBITDA: $2.29B
Total Debt: $8.92B
Cash: $202.69M
Revenue: $4.70B
Revenue: $4.70B
Revenue: $4.70B
Total Equity: $13.56B
Tax Rate: 18.9%
Equity: $13.56B
Total Debt: $8.92B
Cash: $202.69M
Current Liabilities: $1.36B
Long-Term Debt: $8.91B
Total Debt: $8.92B
Total Equity: $13.56B
Shares: 160,573,000
Shares: 160,573,000
CapEx: -$3.56B
Shares: 160,573,000
Stock Price: $167.22
Net Income: $1.20B
Industry Benchmarks
Income Statement (Annual)
Last updated: Aug 28, 2026 2:52am (40d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $3.4B | $4.2B | $4.3B | $4.2B | $4.7B |
| Cost of Revenue | $1.0B | $1.7B | $1.5B | — | — |
| Gross Profit | $2.4B | $2.5B | $2.8B | — | — |
| Operating Expenses | $1.5B | $1.6B | $1.8B | — | — |
| Operating Income | $905.0M | $921.0M | $1.1B | $1.4B | $1.6B |
| Net Income | $665.6M | $774.4M | $885.9M | $1.0B | $1.2B |
| EBITDA | $1.4B | $1.5B | $1.7B | $2.0B | $2.3B |
| EPS | $5.12 | $5.61 | $6.10 | $6.83 | $7.54 |
| EPS (Diluted) | $5.12 | $5.60 | $6.10 | $6.83 | $7.46 |
Balance Sheet (Annual)
Last updated: Aug 28, 2026 2:30am (40d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Cash & Equivalents | $116.7M | $51.6M | $15.4M | $307.3M | $202.7M |
| Total Current Assets | $2.8B | $3.0B | $885.8M | $1.1B | $1.1B |
| Total Assets | $19.6B | $22.2B | $22.5B | $25.2B | $28.2B |
| Current Liabilities | $3.5B | $3.6B | $1.4B | $1.2B | $1.4B |
| Long-Term Debt | $4.9B | $5.8B | $6.6B | $7.8B | $8.9B |
| Total Liabilities | $11.7B | $12.8B | $11.6B | $13.0B | $14.7B |
| Total Equity | $7.9B | $9.4B | $10.9B | $12.2B | $13.6B |
| Retained Earnings | $2.8B | $3.2B | $3.7B | $4.2B | $4.9B |
Cash Flow (Annual)
Last updated: Aug 28, 2026 2:52am (40d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Operating Cash Flow | -$1.1B | $977.6M | $3.5B | $1.7B | $2.0B |
| Capital Expenditure | -$2.0B | -$2.4B | -$2.8B | -$2.9B | -$3.6B |
| Free Cash Flow | -$3.1B | -$1.5B | $653.8M | -$1.2B | -$1.5B |
| Acquisitions (net) | — | — | — | — | — |
| Net Debt Issued / (Repaid) | $2.8B | $598.8M | -$1.4B | $1.2B | $1.1B |
| Dividends Paid | -$323.9M | -$375.9M | -$430.3M | -$493.0M | -$553.8M |
| Stock Buybacks | — | — | — | — | — |
| Net Change in Cash | $95.9M | -$65.2M | -$32.3M | $289.6M | -$105.1M |
Growth Trends (YoY %)
Last updated: Aug 28, 2026 2:52am (40d ago)| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue Growth | +23.3% | +1.8% | -2.6% | +12.9% |
| Gross Profit Growth | +6.1% | +12.1% | — | — |
| Operating Income Growth | +1.8% | +15.9% | +27.0% | +15.1% |
| Net Income Growth | +16.4% | +14.4% | +17.7% | +14.9% |
| EBITDA Growth | +5.3% | +14.7% | +21.2% | +13.3% |
Dividend History (Last 20)
Last updated: Aug 28, 2026 2:30am (40d ago)| Date | Dividend | Declaration | Record | Payment |
|---|---|---|---|---|
| 2026-08-24 | $1.00 | — | — | — |
| 2026-05-26 | $1.00 | — | — | — |
| 2026-02-23 | $1.00 | — | — | — |
| 2025-11-24 | $1.00 | — | — | — |
| 2025-08-25 | $0.87 | — | — | — |
| 2025-05-27 | $0.87 | — | — | — |
| 2025-02-25 | $0.87 | — | — | — |
| 2024-11-25 | $0.87 | — | — | — |
| 2024-08-26 | $0.81 | — | — | — |
| 2024-05-24 | $0.81 | — | — | — |
| 2024-02-23 | $0.81 | — | — | — |
| 2023-11-24 | $0.81 | — | — | — |
| 2023-08-18 | $0.74 | — | — | — |
| 2023-05-19 | $0.74 | — | — | — |
| 2023-02-16 | $0.74 | — | — | — |
| 2022-11-25 | $0.74 | — | — | — |
| 2022-08-19 | $0.68 | — | — | — |
| 2022-05-20 | $0.68 | — | — | — |
| 2022-02-17 | $0.68 | — | — | — |
| 2021-11-26 | $0.68 | — | — | — |
Deep Analysis
Risk : Reward — upside vs downside from this company's own quarters
Not computed yetNarrative Economics
market-narrative step).
Growth Outlook
Analyzed 2026-08-28 03:01The question every valuation on this page silently assumes: is this company likely to grow? Judged forward — the business, its category, the world — against what's already printed.
Claude Reading
The raw numbers tell a clear story of a well-run regulated utility with genuine acceleration but a balance sheet screaming capital intensity. TTM revenue is ~$5.02B (summing the last four quarters) vs FY2025 of $4.70B, with earnings YoY at ~15% and the most recent Q (Jun-26) showing 27.6% net margin vs 22.2% year-ago — that's real rate-base earnings power flowing through. But FCF was **-$1.51B** on $3.56B of capex against $2.05B of operating cash, meaning the dividend (2.4% yield, 46% payout of GAAP earnings) is entirely debt- and equity-funded. Total debt is $8.92B against $202M cash and current ratio 0.77. This is not a self-funding compounder; it's a regulated growth story that requires continuous capital market access. ROIC of 5.7% against a WACC that in a 4%+ rate world is probably 6-7% means Atmos is arguably destroying economic value at the margin while GAAP earnings grow — a classic regulated-utility optical illusion where rate base expansion drives NI but shareholder capital compounds slowly.
On valuation: 22.4x P/E and 5.7x P/S for a gas utility with 5% revenue CAGR is aggressive. Peer regulated gas names (NJR, SR, NWN, OGS) trade 15-18x. The synthesis composite of ~$128 fair value looks directionally right — I'd anchor fair value in the $125-140 range depending on how much credit you give the recent earnings acceleration and Texas rate-base tailwinds (Atmos's core APT pipeline segment is genuinely advantaged). At $167, you're paying a ~25-30% premium for what is fundamentally a 4-6% top-line grower with 8.8% ROE. The pre-flight thesis correctly identifies this as duration-yield trade — investors buying "safe" cash flows at a premium because Treasuries and credit no longer feel safe enough. That's a rate-cut narrative, not a fundamentals narrative.
Where I'd push back on the prior models: the "Market Forces = Neutral / fair value" call contradicts the synthesis's -23.5% overvaluation flag, and I side with synthesis. Market Forces seems to be double-counting sector leadership and giving Atmos peer-relative credit it doesn't deserve on absolute cash economics. The narrative layer is honest — this IS a story premium — but I'd argue "moderate durability" understates the fragility: any softening in the duration-yield trade (a steepening curve, credit spread widening, or one adverse Texas PUC ruling on ROE) removes 15-20% of the multiple quickly. The contrarian bull case that the models underweight: Texas population/industrial growth is real, APT's regulated pipeline earns premium ROEs (~11%+ in that segment), and if you assume $6.50 forward EPS growing 7-8%, then 22x isn't insane for a AA-rated regulated monopoly. But even that math gets you to $140-150, not $167.
The insider "net buying" signal is essentially noise — one 300-share purchase in August 2026 is a rounding error, not conviction. Ignore it. More concerning is what's missing: I don't see meaningful insider buying at these levels from executives who know the rate-case pipeline intimately, which for a stock 30% above DCF fair value is a mild negative tell. The accelerating quarterly trend is partially seasonal (gas utilities front-load winter earnings — compare Q2 to Q2, not sequentially) and partially real rate-base flow-through; strip out the seasonality and you get closer to that 15% earnings YoY, which is genuine but not $167-justifying. I dissent partially from synthesis's "fully_priced" framing only in that I think it's slightly worse than that — the negative FCF and 6:1 debt-to-cash ratio mean this isn't just overvalued, it's overvalued AND financially fragile if capital markets tighten. A 50bp move up in long rates probably takes ATO to $145 fast. I'd wait for $135-140 for a starter position, or a genuine rate-case setback that resets sentiment. Owning here is paying full price for regulatory perfection while ignoring that the company can't fund its own dividend.
GPT Reading
Atmos looks like a very high-quality regulated gas utility that the market has pushed into “bond proxy plus” territory. The operating record is undeniably strong: annual revenue rose from $3.41 billion in FY2021 to $4.70 billion in FY2025, but more impressive is earnings growth, with net income up from $665.6 million to $1.20 billion over that span, a roughly 16% CAGR. Operating income expanded from $905 million to $1.56 billion, so this is not just pass-through commodity noise; profitability has structurally improved. Quarterly numbers reinforce that trend. The latest four quarters sum to roughly $4.91 billion of revenue and about $1.40 billion of net income, versus about $4.63 billion and $1.16 billion in the prior four-quarter period, so earnings are still compounding faster than sales. Net margins running in the mid-20s to 30% range are unusually strong for a utility, and the latest June quarter showed 27.6% margin on $879 million of revenue versus 22.2% a year earlier on $839 million. That is a business with real regulatory execution and rate-base growth, not a sleepy no-growth distributor.
The problem is that the stock price already capitalizes that execution at a level that leaves little room for error. At $167.22, Atmos trades at 22.4x earnings, about 2.0x book, 15.4x EV/EBITDA, and 5.7x sales. For a regulated gas utility with ROE of 8.8% and ROIC of 5.7%, that is rich. You are paying a premium multiple for a company whose long-term economics are still utility economics: capital intensive, regulator-mediated, and not especially high return on incremental capital. The biggest disconnect is cash. Operating cash flow was a healthy $2.05 billion in FY2025, but capex was $3.56 billion, producing negative free cash flow of $1.51 billion. That is not a one-off blemish; it is the core model of the next several years if growth remains this heavy. With only $203 million of cash against $8.92 billion of debt and a current ratio of 0.77, Atmos is effectively asking equity holders to keep awarding it a premium valuation while it funds a huge build program externally. That can work in a favorable rate and regulatory environment, but it is not the balance-sheet simplicity the valuation implies.
What stands out to me is that the market is rewarding Atmos more like a scarce compounder than a utility. Yet revenue growth of 4.9% over time is decent, not exceptional, and the earnings outperformance is partly a function of allowed-return realization and operating leverage that may not repeat indefinitely. A 2.4% dividend yield is also not compensating investors for paying up; the payout ratio at 46% is fine, but the income case is weak at this entry point. If I annualize the latest trailing earnings power near $1.40 billion, the stock still sits around 20x-plus on a forward-ish basis for a business with negative free cash flow and structural capex demands. I can justify a premium to slower peers because Atmos has clearly been executing better than average, but I cannot justify this much premium. My read is that fair value is closer to the high-$130s to mid-$140s, where the quality is still respected but the financing burden and long-duration transition risks are better reflected.
The best argument against that view is straightforward: the market may be right to pay up because Atmos has earned it. Earnings have risen from $774 million in 2022 to $1.20 billion in 2025 and continue to grow double digits, while debt to equity at 0.66 is not extreme for a utility. The latest quarterly comparisons are all good: March quarter net income rose from $485.6 million to $581.9 million on nearly flat-to-slightly higher seasonal revenue, and December quarter net income rose from $351.9 million to $403.0 million as margins held near 30%. If the company can keep converting capex into rate base at attractive authorized returns, today’s negative free cash flow is not a sign of weakness but evidence of visible future earnings growth. On that framing, a 22x P/E is the price of consistency in a market that values defensiveness and inflation-linked asset growth. I weigh that argument less heavily because the valuation already assumes that execution continues cleanly, financing stays available, and gas distribution avoids any serious policy derating. When a utility is priced for excellence, merely remaining good is not enough.
What would change my mind is either price or proof. On proof, if Atmos can sustain annualized net income around $1.45 billion to $1.50 billion while lifting operating cash flow enough to narrow the free cash flow deficit materially—say from negative $1.5 billion toward better than negative $800 million without a leverage blowout—the premium becomes more defensible. I would also want to see debt growth remain controlled relative to equity and evidence that regulators keep allowing timely recovery on this capex cycle. On price, a pullback into roughly $140 or below would make me much more constructive even without a dramatic fundamental change, because then investors would still own the same high-quality utility but with less perfection embedded in the multiple.
Grok Reading
The numbers describe a well-run regulated gas utility executing a classic rate-base growth strategy, not a growth compounder that deserves a 22x earnings multiple. Fiscal 2025 revenue of $4.70B produced $1.20B in net income, up from $1.04B on $4.17B the prior year, and the trailing earnings CAGR of 16.3% far outpaces the 4.9% revenue CAGR because operating leverage and allowed returns are flowing through cleanly—annual operating margin sits at 33.2% and net margin at 25.5%. Seasonal winter quarters remain the profit engine ($1.96B revenue and $582M NI in the March 2026 quarter; $1.34B and $403M in December 2025), and year-ago comparisons show clear margin expansion, not just weather. The balance sheet is standard utility leverage: $8.92B debt against $13.56B equity (D/E 0.66) and a thin $203M cash pile. What the models under-emphasize is that the negative $1.51B free cash flow on $2.05B of operating cash flow is not a quality failure; it is the deliberate $3.56B capex program that builds the rate base regulators will allow them to earn on. That is the entire equity story.
The problem is price, not operations. At $167.22 the stock trades at 22.4x earnings, 15.4x EV/EBITDA, 1.98x book and 5.7x sales while delivering only 8.8% ROE and 5.7% ROIC. Those returns are adequate for a regulated monopoly and consistent with a mid-teens multiple and a 3%-plus yield; they do not justify a 2.4% dividend yield and a roughly 30–35% premium to the peer gas-utility band of 15–17x. The valuation synthesis fair value near $128 (signal-adjusted ~$128) is directionally correct even if the precise DCF is debatable—the market is capitalizing duration and regulatory safety that is already fully visible in the allowed-return framework. Insider activity is a 300-share purchase, noise, not a signal. Revenue is accelerating on a quarterly basis, but that is volume and rate recovery inside a capped-return model, not multiple expansion fuel.
The strongest opposing case is straightforward: earnings power is real and still climbing, the company is a sector leader with moderate narrative durability, and regulated utilities can trade rich for long stretches when rates are falling or when income portfolios bid up “safe” duration. A bull would note that 14.9% recent earnings growth, a 46% payout ratio that leaves room for dividend growth, and multi-year visibility on capex-to-rate-base conversion mean the $167 price simply reflects a higher terminal growth and lower risk premium than the composite models assume. They would also argue that stranded-asset and electrification risk is overstated for a pure-play gas distributor with contracted residential load and supportive state commissions. I weigh that case as legitimate on operations and wrong on valuation: an 8.8% ROE business levered to ongoing external financing for negative FCF does not clear a 22x hurdle when the risk-free rate and utility cost of equity have normalized higher. Paying 22x for mid-single-digit top-line growth and high-single-digit ROE is a bet that nothing goes wrong on regulation, weather normalization, or capital costs—an asymmetric setup.
I would flip toward fair value or modestly undervalued if the next two fiscal years deliver sustained earnings growth above 12% while the payout stays under 50% and the multiple compresses toward 18x on rising earnings rather than a price collapse, or if management demonstrates FCF inflection as a larger share of the rate base begins to earn without proportional incremental capex. A clear adverse regulatory order in a core jurisdiction, a sustained rise in funding costs that squeezes allowed ROE spreads, or two consecutive years of sub-5% earnings growth would confirm the overvaluation and push me to a harder underweight.
Big-3 Panel — where each AI stands
Advanced Analysis Forensic deep-dive · separate lenses
Atmos is a classic regulated gas LDC in heavy capex mode. Revenue grew from $3.41B (2021) to $4.70B (2025), operating margin expanded from 26.6% to 33.2%, and net income rose from $665.6M to $1.20B — a clean, monotone earnings trajectory typical of a well-managed rate-base compounder. OCF/NI at 1.38x and accruals of -1.8% of assets indicate reported earnings are backed by cash from operations, not accounting artifacts. Insider tape is quiet but directionally positive (one small open-market buy, no sales). The catch is the funding model: free cash flow has been negative in four of the last five years (-$3.05B, -$1.47B, +$0.65B, -$1.20B, -$1.51B) because rate-base capex vastly exceeds OCF. That gap is plugged with debt (net debt $8.72B, cash only $202.7M) and steady share issuance — diluted shares grew from 129.8M to 160.6M, a 5.5% CAGR, meaning roughly a quarter of the earnings growth is absorbed by a larger share count. Altman Z of 1.73 flags 'distress' but the model misreads regulated utilities, whose leverage is structural and supported by allowed returns. Overall: a durable, well-run regulated franchise with weak per-share discipline by necessity of the capex cycle.
Verify before trusting this (5)
- Allowed ROE and equity-thickness in key jurisdictions (TX, LA, MS, CO) to confirm rate-base recovery economics
- ATM/equity issuance program size and pace disclosed in 10-K to gauge future dilution
- Capex plan and multi-year rate-base growth guidance
- Debt maturity ladder and any near-term refinancing walls
- Regulatory lag and pipeline replacement rider mechanics
The e2e composite pins fair value at $119 and the signal-adjusted mark at $128, implying roughly 23% downside from $167.22. The anchored-PE method stretches to $205 by extrapolating current multiple and growth, while the EPV floor at $33 is a runaway low-end that ignores the regulated rate-base compounding model and should be discounted. Splitting the difference, a deserved value in the $125-140 range for a solid but capital-hungry regulated gas utility feels right, which puts today's price 20-30% above deserved. What is priced in: uninterrupted rate-base growth, constructive regulatory outcomes across Texas and its other jurisdictions, and no material acceleration of electrification/decarbonization risk. Earnings quality is good, which supports the deserved multiple, but the 5.5% share-count growth is a quiet drag that the market is currently ignoring. Utilities have re-rated broadly on rate-cycle optimism, and ATO is riding that wave. This is not a valuation setup that offers a margin of safety. A solid business at a full-to-rich price is a hold-and-watch, not a buy. I would want a mid-teens percent discount to deserved before it becomes interesting.
Verify before trusting this (4)
- Forward rate-case outcomes in Texas (Mid-Tex, APT) and the implied allowed ROE trajectory
- Updated 5-year capex and equity issuance plan — how much of FCF gap is funded by dilution vs debt
- Any state-level decarbonization or building-electrification rulings that could compress terminal rate base
- Guidance for EPS growth vs share-count growth to size real per-share compounding
ATO is a 0.6-beta regulated gas utility, so the risk-on tape (+40, VIX 14.5) barely moves it directly - defensives don't ride bull tapes hard. But the tape being calm rather than stressed matters: it removes the risk-off flight-to-safety bid that sometimes lifts utilities AND removes the forced-selling headwind. Net, the macro backdrop is a light neutral-to-positive breeze on this specific name, not a driver. The 10y at 4.66% is a persistent low-grade headwind for any bond-proxy utility, but rates have been in this zone long enough that it is priced into the sector rather than actively de-rating it. The narrative flow is the real story here and it is quietly favorable. Multiple analyst notes this week are grouping ATO with OGS and MDU as beneficiaries of rising US natural gas demand and infrastructure spend - that is the bull-story archetype being actively reinforced in print. A Zacks upgrade to Buy on rising earnings estimates adds a concrete positive revision signal. The bear narrative (ESG backlash, electrification, heat pumps) exists but is dormant in the current news cycle - no regulatory shock, no state mandate headline hitting the tape. Momentum is positive (recent 12.9% vs 4.9% long-term trend), consistent with a name whose story is quietly working.
Verify before trusting this (4)
- Whether the Zacks upgrade is followed by real target-price revisions from bulge-bracket names
- Any state-level decarbonization or gas-hookup-ban headline that reawakens the bear narrative
- 10y yield direction - a break above 4.8% would pressure utility multiples
- Sector rotation signals - if VIX spikes, does ATO catch a defensive bid or get sold with the tape
The world is pulling this business in two directions on different clocks. Near-to-medium term, US gas demand is being reinforced, not eroded: gas-fired generation is the marginal supplier for data-center and electrification load, industrial reshoring in the Gulf region is gas-intensive, and Sun Belt in-migration adds meters. Macro headwinds (10y at 4.66%, mild positive curve) raise financing cost for a capital-hungry model, which is a margin-of-growth issue rather than a direction issue because regulators eventually reset allowed returns to prevailing rates. Long term, building electrification and decarbonization mandates are the real structural question — but they bite hardest in Northeast and West Coast jurisdictions, not in Texas, Louisiana, Mississippi, Kansas and Tennessee, where the political economy favors gas. The reasonable read: the growth algorithm is intact through the visible horizon, with terminal-decade risk that is real but not yet showing in operating data.
When we made this prediction on Aug 28, 2026, ATO was $166.75. We expect it to be $147.00 by Feb 2027, and we consider it great value under $130.00. This is an early model (v0.6.0) — the direction is more reliable than the exact price. Made Aug 28, 2026.
Blue is our prediction, starting the day we made it. Grey is a slower route to the same place — the same destination, taking longer. Black is the actual price, so you can see how we are doing.
Post-Report Due Diligence UNSETTLED
Evidence for a closer look, not a verdict — no score or designation on this page has been changed by it. Items marked material are ones where a conclusion above moves to the other side of the price.
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