ATO
Atmos Energy Corporation$185.38
Unclear
Target $174.97
Report: Mar 09, 2026Utilities • Regulated Gas • Asset-Based OperatorSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$185.38-5.6%
Rec: UnclearConviction: Medium
Entry Target
$134.59
(27% below current)
Fair Value
$174.97
(6% below current)
Stop Loss
$129.77
(30% below current)
Position Size
Starter
Time Horizon
Strategic (2-3 Years)
Key Metrics
Live Snapshot
Market Data
52 Week High$190.13
52 Week Low$141.59
Avg. 3 Month Volume1.32M
Efficiency
LTM Gross Margin76.8%
LTM EBITDA Margin50.3%
LTM EBIT Margin35.0%
LTM Operating Margin33.2%
LTM ROA4.4%
LTM ROE9.2%
LTM ROIC4.9%
LTM ROCE6.4%
Capital Structure
Market Cap (MM)$30.6B
Enterprise Value (MM)$39.8B
Shares Outstanding162.73M
Total Debt (MM)$9.63B
Cash & Equivalents (MM)$371.51M
LTM Net Debt (MM)$9.26B
LTM Net Debt/EBITDA3.8x
Growth
TTM Rev. Growth16.4%
Last 3-Yr Rev. CAGR1.4%
Last 3-Yr EBITDA CAGR16.1%
Last 3-Yr EPS CAGR11.1%
Valuation
Street Target Price$178.25
LTM EV/Revenue8.2x
LTM EV/Gross Profit10.6x
LTM EV/EBIT23.4x
LTM EV/EBITDA16.2x
LTM P/E24.5x
LTM EV/FCF-24.5x
LTM P/FCF-18.8x
LTM P/TB1.1x
LTM P/B2.1x
Dividend Yield2.0%
Payout Ratio46.5%
Executive SummarySituation: Current price is $185.38 versus fair value $174.97 (-5.6% expected return), and valuation confidence is stable. Debate: Bull case depends on HB 4384 Full Implementation This legislation increases eligible CapEx for recovery from 45% to 80%, significantly improving earnings visibility and cash flow timing for the company's $26 billion investment plan. Bear case centers on Equity Dilution and Capital Market Dependency The company's $26 billion CapEx plan requires persistent negative free cash flow, making it dependent on issuing new equity to fund dividends and growth. Conclusion: Recommendation is Unclear; maintain no position until reliability and catalyst evidence improve.
Bull Case
Atmos offers a structurally wide moat with 98% of its rate base in all-fuels jurisdictions and a 23-year streak of EPS growth. The passage of HB 4384 provides unprecedented earnings visibility and accelerates the recovery of its $3.6 billion annual CapEx spend.
Bear Case
The company's capital allocation is value-destructive, with an incremental ROIC of 4.2% that sits well below its 9.5% WACC. Persistent negative free cash flow necessitates constant equity dilution, which has resulted in a 5.2% YoY increase in share count, eroding per-share value.
Key Catalysts
Near-Term (0-6 months)Impact: High
HB 4384 Full Implementation This legislation increases eligible CapEx for recovery from 45% to 80%, significantly improving earnings visibil...
Mid-Term (6-18 months)Impact: Moderate
Data Center Load Interconnects New interconnect projects, such as the 700,000 Mcf/day supply additions, are designed to capture high-margin...
Long-Term (18+ months)Impact: Moderate
Atmos is currently relevant for analysis as it trades near all-time highs following the passage of HB 4384, while simultaneously facing a Mo...
Primary Risks
Concern: High
Equity Dilution and Capital Market Dependency The company's $26 billion CapEx plan requires persistent negative free cash flow, making it de...
Concern: Medium
Aging Infrastructure and Litigation Exposure The presence of 500 miles of cast iron and 3,500 miles of unprotected bare steel pipelines crea...
Concern: Medium
The stewardship verdict is 'Adequate but Dilutive'. The board is highly independent and features strong financial expertise, including Audit...
Recent Activity
2022-11-10SEC Filing (8-K)
+8.39%Atmos Energy reports fiscal 2022 earnings, initiates fiscal 2023 guidance, and raises dividend
Valuation Table
8.1/10Decision Grade
Scenario Range
$42
Bear
$4
Base
$195
Bull
$185