Atmos Energy (ATO)
Utilities · $29.2B market cap · SEC CIK 0000731802
ahead of 79% of the S&P 500 · #4 of 31 in Utilities
Next reports on Feb 1, 2027, with analysts expecting $2.61 in earnings per share.
52-week range $154.72 to $192.51. 9% below its 52-week high and 13% above its low.
The case for ATO
- 29% of revenue drops through to net profit.
- Pays a 2.9% dividend while you wait.
- Has compounded revenue at 10.8% a year over five years.
- Moves less than the market (beta 0.52).
The case against
- Burned $1.5B of free cash in FY2025.
- Current liabilities exceed current assets (ratio 0.81).
- Long-term debt of $8.9B against $203M of cash.
- Price/sales of 5.9× is higher than 90% of Utilities companies.
What the score is made of
Each factor is half a curve over reported figures and half a rank among the other Utilities companies (momentum is judged against fixed thresholds only), and the five are blended by weight. The score is where that blend places it in the S&P 500. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings and cash, against the growth you get | 58 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 67 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 62 |
| Momentumhow the price has behaved lately | 52 |
| Stabilityhow violently it moves, what it owes and what it pays you | 86 |
- Each factor except momentum is half fixed thresholds, half rank among the 31 Utilities companies.
The financials
Revenue growth
Is the business growing? Slowly
| Last 12 months | +6.5% |
|---|---|
| Over 5 years | +10.8% a year |
| FY2025 revenue | $4.7B (+13%) |
Free cash flow
Is it generating real cash? No, it is burning cash
| FY2025 free cash flow | −$1.5B |
|---|---|
| Of revenue | −32% |
| Of profit | −126% |
Profit margins
Is profitability improving? Yes, improving
| Gross margin | 48% |
|---|---|
| Operating margin | 37% |
| Net margin, FY24 → FY25 → now | 25.0% → 25.5% → 28.5% |
Debt vs. cash
Is the balance sheet healthy? Mostly, with some debt to carry
| Cash | $203M |
|---|---|
| Long-term debt | $8.9B |
| Net debt | $8.7B |
| Years to repay | 4.3 yrs |
Valuation
Is the stock price reasonable? Yes, about fair
| P/E | 20.8× |
|---|---|
| Fair P/E for its growth | 24× |
| Forward P/E | 19.1× |
| EV / EBITDA | 15.0× |
At 20.8× earnings it trades close to the 24× that 8%+ a year of growth plus a 2.9% dividend would justify. As a utility it is judged on earnings alone: it borrows to build, so its free cash flow says little about its price.
The financials, five years deep
Pulled from Atmos Energy's XBRL filings on SEC EDGAR. Italic rows are worked out from the others.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Revenue growth | |||||
| Revenue | $4.7B | $4.2B | $4.3B | $4.2B | $3.4B |
| Change on the year | +13% | −3% | +2% | +23% | — |
| Free cash flow | |||||
| Free cash flow | −$1.5B | −$1.2B | $654M | −$1.5B | −$3.1B |
| Of revenue | −32% | −29% | 15% | −35% | −90% |
| Profit margins | |||||
| Operating margin | 33.2% | 32.5% | 25.0% | 21.9% | 26.6% |
| Net margin | 25.5% | 25.0% | 20.7% | 18.4% | 19.5% |
| Debt vs. cash | |||||
| Cash | $203M | $307M | $15.4M | $51.6M | $117M |
| Long-term debt | $8.9B | $7.8B | $6.6B | $5.8B | $4.9B |
| Net cash (debt) | −$8.7B | −$7.5B | −$6.5B | −$5.7B | −$4.8B |
What Atmos Energy says it does
Overview and Strategy Atmos Energy Corporation, a natural gas-only distributor, is an S&P 500 company headquartered in Dallas and incorporated in Texas and Virginia. We safely deliver reliable, efficient, and abundant natural gas through regulated sales and transportation arrangements to approximately 3.4 million residential, commercial, public authority, and industrial customers in eight states located primarily in the South. We also operate one of the largest intrastate pipelines in Texas based on miles of pipe. Atmos Energy's vision is to be the safest provider of natural gas services. We will be recognized for exceptional customer service, for being a great employer, and for achieving superior financial results. Our operating strategy is focused on modernizing our business and infrastructure while reducing regulatory lag. This operating strategy supports continued investment in safety, innovation, environmental sustainability, and…
Risk factors ATO lists in its 10-K
- We are subject to federal, state, and local regulations that affect our operations and financial results
- Some of our operations are subject to increased federal regulatory oversight that could affect our operations and financial results
- We may experience increased federal, state, and local regulation of the safety of our operations
- We may incur significant costs and liabilities resulting from pipeline integrity and other similar programs and related repairs
- Distributing, transporting, and storing natural gas involve risks that may result in accidents and additional operating costs
- Our operations are subject to increased competition
- Natural disasters, adverse weather, terrorist activities, or other significant events could adversely affect our operations or financial results
- The failure of technology may hinder the Company’s business operations and adversely affect its financial condition and results of operations
- Cyber-attacks or acts of cyber-terrorism could disrupt our business operations and information technology systems or result in the loss or exposure of confidential or sensitive customer, employee or Company information
- Adverse weather conditions could affect our operations or financial results
- Legislation to reduce or eliminate greenhouse gas emissions or fossil fuels could increase our operating costs, adversely affecting our financial results, growth, cash flows, and results of operations
- The operations and financial results of the Company could be adversely impacted as a result of climate change
- Our growth in the future may be limited by the nature of our business, which requires extensive capital spending
- The Company is dependent on continued access to the credit and capital markets to execute our business strategy
- We are exposed to market risks that are beyond our control, which could adversely affect our financial results
- The concentration of our operations in the State of Texas exposes our operations and financial results to economic conditions, weather patterns, and regulatory decisions in Texas
- A deterioration in economic conditions could adversely affect our customers and negatively impact our financial results
- Increased gas costs could adversely impact our customer base and customer collections and increase our level of indebtedness
- Our pension and other postretirement benefit plans are subject to investment and interest rate risk that could negatively impact our financial condition