Atmos Energy (ATO)
Market Price (5/10/2026): $180.85 | Market Cap: $30.1 BilSector: Utilities | Industry: Gas Utilities
Atmos Energy (ATO)
Market Price (5/10/2026): $180.85Market Cap: $30.1 BilSector: UtilitiesIndustry: Gas Utilities
Investment Highlights Why It Matters Detailed financial logic regarding cash flow yields vs trend-riding momentum.
Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 5.5% Attractive operating marginsOp Mgn LTMOperating Margin = Operating Income / Revenue Reflects profitability before taxes and before impact of capital structure (interest payments). is 36% Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 38% Low stock price volatilityVol 12M is 16% Megatrend and thematic driversMegatrends include Smart Grids & Grid Modernization, and Energy Transition & Decarbonization. Themes include Smart Metering, Grid Automation, Show more. | Weak multi-year price returns3Y Excs Rtn is -8.4% | Expensive valuation multiplesP/SPrice/Sales ratio is 6.2x, P/CFOPrice/(Cash Flow from Operations). CFO is cash before capital expenditures. is 16x Not cash flow generativeFCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is -41% Key risksATO key risks include [1] executing its substantial multi-year capital expenditure program and [2] its critical dependence on timely and favorable regulatory approvals for cost recovery. |
| Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 5.5% |
| Attractive operating marginsOp Mgn LTMOperating Margin = Operating Income / Revenue Reflects profitability before taxes and before impact of capital structure (interest payments). is 36% |
| Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 38% |
| Low stock price volatilityVol 12M is 16% |
| Megatrend and thematic driversMegatrends include Smart Grids & Grid Modernization, and Energy Transition & Decarbonization. Themes include Smart Metering, Grid Automation, Show more. |
| Weak multi-year price returns3Y Excs Rtn is -8.4% |
| Expensive valuation multiplesP/SPrice/Sales ratio is 6.2x, P/CFOPrice/(Cash Flow from Operations). CFO is cash before capital expenditures. is 16x |
| Not cash flow generativeFCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is -41% |
| Key risksATO key risks include [1] executing its substantial multi-year capital expenditure program and [2] its critical dependence on timely and favorable regulatory approvals for cost recovery. |
Qualitative Assessment
AI Analysis | Feedback
1. Strong Fiscal 2026 Performance and Upgraded Outlook. Atmos Energy reported better-than-expected earnings for its fiscal first quarter (ended December 31, 2025) on February 3, 2026, with an Earnings Per Share (EPS) of $2.44, surpassing the consensus estimate of $2.41. This positive momentum continued into the fiscal second quarter (ended March 31, 2026), reported on May 6, 2026, where the company announced diluted EPS of $5.92 for the six-month period and raised its fiscal 2026 EPS guidance to a range of $8.40-$8.50 from the previous $8.15-$8.35.
2. Consistent Regulatory Rate Recoveries Supporting Infrastructure Investment. The company effectively implemented significant annualized regulatory outcomes, amounting to $122.5 million in the first fiscal quarter and an additional $135.3 million in the second fiscal quarter. These rate adjustments, coupled with a robust capital expenditure plan of approximately $4.2 billion for fiscal 2026 (with over 85% allocated to safety and reliability), are critical for a regulated utility and provide predictable revenue streams to support ongoing investments and growth.
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Stock Movement Drivers
Fundamental Drivers
The 9.3% change in ATO stock from 1/31/2026 to 5/10/2026 was primarily driven by a 8.2% change in the company's Net Income Margin (%).| (LTM values as of) | 1312026 | 5102026 | Change |
|---|---|---|---|
| Stock Price ($) | 165.42 | 180.85 | 9.3% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 4,703 | 4,881 | 3.8% |
| Net Income Margin (%) | 25.5% | 27.6% | 8.2% |
| P/E Multiple | 22.2 | 22.4 | 0.6% |
| Shares Outstanding (Mil) | 161 | 166 | -3.3% |
| Cumulative Contribution | 9.3% |
Market Drivers
1/31/2026 to 5/10/2026| Return | Correlation | |
|---|---|---|
| ATO | 9.3% | |
| Market (SPY) | 3.6% | -12.3% |
| Sector (XLU) | 4.1% | 80.1% |
Fundamental Drivers
The 6.5% change in ATO stock from 10/31/2025 to 5/10/2026 was primarily driven by a 10.1% change in the company's Net Income Margin (%).| (LTM values as of) | 10312025 | 5102026 | Change |
|---|---|---|---|
| Stock Price ($) | 169.80 | 180.85 | 6.5% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 4,623 | 4,881 | 5.6% |
| Net Income Margin (%) | 25.0% | 27.6% | 10.1% |
| P/E Multiple | 23.4 | 22.4 | -4.3% |
| Shares Outstanding (Mil) | 159 | 166 | -4.3% |
| Cumulative Contribution | 6.5% |
Market Drivers
10/31/2025 to 5/10/2026| Return | Correlation | |
|---|---|---|
| ATO | 6.5% | |
| Market (SPY) | 5.5% | -5.2% |
| Sector (XLU) | 1.8% | 71.6% |
Fundamental Drivers
The 15.1% change in ATO stock from 4/30/2025 to 5/10/2026 was primarily driven by a 16.7% change in the company's Total Revenues ($ Mil).| (LTM values as of) | 4302025 | 5102026 | Change |
|---|---|---|---|
| Stock Price ($) | 157.13 | 180.85 | 15.1% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 4,183 | 4,881 | 16.7% |
| Net Income Margin (%) | 25.9% | 27.6% | 6.5% |
| P/E Multiple | 22.7 | 22.4 | -1.3% |
| Shares Outstanding (Mil) | 156 | 166 | -6.1% |
| Cumulative Contribution | 15.1% |
Market Drivers
4/30/2025 to 5/10/2026| Return | Correlation | |
|---|---|---|
| ATO | 15.1% | |
| Market (SPY) | 30.4% | -2.1% |
| Sector (XLU) | 16.6% | 70.4% |
Fundamental Drivers
The 70.6% change in ATO stock from 4/30/2023 to 5/10/2026 was primarily driven by a 61.7% change in the company's Net Income Margin (%).| (LTM values as of) | 4302023 | 5102026 | Change |
|---|---|---|---|
| Stock Price ($) | 106.01 | 180.85 | 70.6% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 4,673 | 4,881 | 4.5% |
| Net Income Margin (%) | 17.1% | 27.6% | 61.7% |
| P/E Multiple | 18.9 | 22.4 | 18.6% |
| Shares Outstanding (Mil) | 142 | 166 | -14.8% |
| Cumulative Contribution | 70.6% |
Market Drivers
4/30/2023 to 5/10/2026| Return | Correlation | |
|---|---|---|
| ATO | 70.6% | |
| Market (SPY) | 78.7% | 17.7% |
| Sector (XLU) | 42.1% | 71.8% |
Price Returns Compared
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Total [1] | |
|---|---|---|---|---|---|---|---|
| Returns | |||||||
| ATO Return | 13% | 10% | 6% | 23% | 23% | 9% | 117% |
| Peers Return | 28% | 9% | -3% | 25% | 18% | 7% | 114% |
| S&P 500 Return | 27% | -19% | 24% | 23% | 16% | 7% | 95% |
Monthly Win Rates [3] | |||||||
| ATO Win Rate | 42% | 58% | 67% | 58% | 75% | 40% | |
| Peers Win Rate | 53% | 57% | 57% | 60% | 60% | 56% | |
| S&P 500 Win Rate | 75% | 42% | 67% | 75% | 67% | 60% | |
Max Drawdowns [4] | |||||||
| ATO Max Drawdown | -11% | -5% | -7% | -4% | -2% | -1% | |
| Peers Max Drawdown | -7% | -7% | -14% | -8% | -7% | -2% | |
| S&P 500 Max Drawdown | -1% | -25% | -1% | -2% | -15% | -7% | |
[1] Cumulative total returns since the beginning of 2021
[2] Peers: SRE, SO, CNP, NI, NFG. See ATO Returns vs. Peers.
[3] Win Rate = % of calendar months in which monthly returns were positive
[4] Max drawdown represents maximum peak-to-trough decline within a year
[5] 2026 data is for the year up to 5/8/2026 (YTD)
How Low Can It Go
| Event | ATO | S&P 500 |
|---|---|---|
| Summer-Fall 2023 Five Percent Yield Shock | ||
| % Loss | -16.5% | -9.5% |
| % Gain to Breakeven | 19.8% | 10.5% |
| Time to Breakeven | 284 days | 24 days |
| 2020 COVID-19 Crash | ||
| % Loss | -32.4% | -33.7% |
| % Gain to Breakeven | 47.9% | 50.9% |
| Time to Breakeven | 710 days | 140 days |
| 2013 Taper Tantrum | ||
| % Loss | -10.8% | -0.2% |
| % Gain to Breakeven | 12.1% | 0.2% |
| Time to Breakeven | 21 days | 1 days |
| 2011 US Debt Ceiling Crisis & European Contagion | ||
| % Loss | -15.5% | -17.9% |
| % Gain to Breakeven | 18.4% | 21.8% |
| Time to Breakeven | 24 days | 123 days |
| 2010 Eurozone Sovereign Debt Crisis / Flash Crash | ||
| % Loss | -10.6% | -15.4% |
| % Gain to Breakeven | 11.9% | 18.2% |
| Time to Breakeven | 63 days | 125 days |
| 2008-2009 Global Financial Crisis | ||
| % Loss | -24.2% | -53.4% |
| % Gain to Breakeven | 31.9% | 114.4% |
| Time to Breakeven | 138 days | 1085 days |
In The Past
Atmos Energy's stock fell -1.8% during the 2025 US Tariff Shock. Such a loss loss requires a 1.8% gain to breakeven.
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| Event | ATO | S&P 500 |
|---|---|---|
| 2020 COVID-19 Crash | ||
| % Loss | -32.4% | -33.7% |
| % Gain to Breakeven | 47.9% | 50.9% |
| Time to Breakeven | 710 days | 140 days |
| 2008-2009 Global Financial Crisis | ||
| % Loss | -24.2% | -53.4% |
| % Gain to Breakeven | 31.9% | 114.4% |
| Time to Breakeven | 138 days | 1085 days |
In The Past
Atmos Energy's stock fell -1.8% during the 2025 US Tariff Shock. Such a loss loss requires a 1.8% gain to breakeven.
Preserve Wealth
Limiting losses and compounding gains is essential to preserving wealth.
Asset Allocation
Actively managed asset allocation strategies protect wealth. Learn more.
About Atmos Energy (ATO)
AI Analysis | Feedback
1. Like Duke Energy, but focused on natural gas distribution and pipelines.
2. A utility company similar to Con Edison or Southern Company, but focused exclusively on natural gas infrastructure and delivery.
AI Analysis | Feedback
- Natural Gas Distribution: Delivering natural gas to residential, commercial, public authority, and industrial customers through a regulated network.
- Natural Gas Transportation: Transporting natural gas through pipelines for third parties.
- Natural Gas Storage: Providing underground storage for natural gas.
- Ancillary Pipeline Services: Offering related services to the pipeline industry, including parking arrangements, lending, and inventory sales.
AI Analysis | Feedback
Atmos Energy (ATO) Major Customers
Atmos Energy primarily sells natural gas to a diverse base of customers, including individuals and various types of organizations. Its Distribution segment, which is its main customer-facing operation, serves the following categories of customers:
- Residential customers
- Commercial customers
- Industrial customers
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Kevin Akers – President and Chief Executive Officer
Kevin Akers was named President and Chief Executive Officer in October 2019. He joined Atmos Energy nearly 29 years ago and has served in multiple leadership roles within the company, including Executive Vice President, Senior Vice President of Safety and Enterprise Services, President of the Kentucky/Mid-States Division, and President of the Mississippi Division. He also led the Mississippi Valley Gas transition team and held Vice President roles in the Louisiana and Kentucky Divisions. Prior to joining Atmos Energy, Mr. Akers served as a senior gas engineer for the Indiana Utility Regulatory Commission from 1989 to 1991. He holds a bachelor's degree in petroleum engineering from the University of Alabama.
Christopher T. Forsythe – Senior Vice President and Chief Financial Officer
Christopher T. Forsythe was named Senior Vice President and Chief Financial Officer in February 2017. He joined Atmos Energy in June 2003 and has held positions as Director of Financial Reporting and Vice President and Controller. Before his tenure at Atmos Energy, Mr. Forsythe was a senior manager at PricewaterhouseCoopers LLP from 1993 to 2003. He is a graduate of Baylor University, where he earned BBA degrees in accounting and management information systems.
Jessica W. Bateman – Senior Vice President, General Counsel and Corporate Secretary
Jessica W. Bateman joined Atmos Energy in January 2025. Before joining the company, she spent over 20 years in private practice at Baker Botts L.L.P. in Dallas. At Baker Botts, she was a partner, handling complex trial and regulatory matters and serving in various administrative capacities.
Travis Cooper – President, Atmos Pipeline-Texas
Travis Cooper was appointed President of Atmos Pipeline – Texas on December 1, 2023. He previously served as Vice President of Pipeline Operations for Atmos Pipeline – Texas, a role he assumed in 2022. Mr. Cooper began his career with Atmos Energy in 2009 as an Engineer in the Mid-Tex Division and has since held diverse roles in engineering, construction management, and operations support, including Vice President of Operations in the Mid-Tex Division.
Richard A. Mitschke – Vice President and Chief Information Officer
Richard A. Mitschke was named Vice President and Chief Information Officer on April 1, 2023. He previously held the role of Vice President of Customer Service, which he started in 2021. Mr. Mitschke joined Atmos Energy in 2008 as Director, IT Strategy and Planning, and later transitioned to Director, Customer Service Systems in 2012. He has also been involved with Atmos Energy's Utility Marketing Council, Utility Operations Council, and the Culture Council. He holds a bachelor's degree from the University of Texas.
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```htmlKey Risks to Atmos Energy (ATO)
- Regulatory and Legislative Risks: Atmos Energy operates in a highly regulated environment, and changes in federal, state, and local regulations and legislation pose a significant risk. These changes can affect the company's ability to recover costs through rates, impact its financial performance, and lead to increased compliance expenses. Regulatory scrutiny, especially concerning utility bills during election years, can intensify, further influencing rate case outcomes and cost recovery mechanisms.
- Operational Safety and Aging Infrastructure Risks: The company's extensive network of natural gas distribution and transmission pipelines, some of which are decades old, presents substantial operational and safety challenges. Risks include pipeline leaks, explosions, and third-party damage, which can lead to service interruptions, legal liabilities, increased maintenance costs, and reputational damage. The need for continuous, significant capital expenditure to modernize infrastructure and ensure safety is a persistent operational and financial consideration.
- Environmental Concerns and Climate Risks: As a natural gas utility, Atmos Energy faces increasing pressure related to environmental sustainability, particularly concerning methane emissions, a potent greenhouse gas. The company is subject to regulatory pressure and potential lawsuits regarding methane leaks. Evolving climate change legislation and policies aimed at reducing greenhouse gas emissions could lead to higher operating costs, impact demand for natural gas in the long term, and necessitate significant investments in emission reduction initiatives.
AI Analysis | Feedback
The clear emerging threat for Atmos Energy is the accelerating trend of **electrification of heating and cooking in residential and commercial buildings**, driven by advancements in technologies like heat pumps and induction stoves, and supported by regulatory actions such as local and state bans on new natural gas hookups in new construction. This trend directly reduces future demand for natural gas distribution and limits growth opportunities for Atmos Energy's core business.
AI Analysis | Feedback
Atmos Energy (symbol: ATO) operates in the United States within the regulated natural gas distribution, and pipeline and storage businesses. The addressable markets for its main products and services in the U.S. are as follows:
Natural Gas Distribution
The U.S. natural gas distribution market was valued at approximately $170.0 billion in 2024 and is projected to increase to $186.0 billion by 2032. Other estimates place the U.S. natural gas distribution market size at $222.5 billion in 2025, growing to $225.5 billion in 2026.
Natural Gas Pipeline and Storage
The U.S. gas pipeline infrastructure market size was estimated at $1,058.73 billion in 2024, grew to $1,149.26 billion in 2025, and is projected to reach approximately $2,431.55 billion by 2034.
For natural gas storage specifically, the U.S. market generated a revenue of $174.4 million in 2024 and is expected to reach $229.5 million by 2030.
AI Analysis | Feedback
Atmos Energy (ATO) is expected to drive future revenue growth over the next 2-3 years through several key initiatives:
- Infrastructure Modernization and Safety Investments: Atmos Energy has a substantial, safety-driven capital expenditure program aimed at modernizing its natural gas distribution, transmission, and storage systems. The company plans to invest approximately $4.2 billion in fiscal year 2026, with over 85% of this capital specifically allocated to safety and reliability initiatives, such as pipeline replacement and system integrity enhancements. These investments expand the company's rate base, which is the asset value upon which regulators allow a return, directly translating into increased earnings and revenue.
- Constructive Regulatory Environment and Rate Case Approvals: The company operates in a generally constructive regulatory environment that supports its capital investment strategy. Favorable outcomes from state regulatory commissions and timely rate case approvals are crucial for Atmos Energy to recover its infrastructure investments and earn an approved return on equity. Over 95% of the company's annual capital spending begins earning a return within six months, minimizing regulatory lag. Recent legislation, such as Texas House Bill 4384, has provided additional benefits by enhancing the company's ability to recover costs associated with new assets.
- Customer Growth in High-Growth Markets: Atmos Energy continues to experience solid customer growth, particularly in its Texas service territory, which benefits from strong employment and housing market expansion. For example, in the 12 months ending December 31, 2025, the company added nearly 54,000 new customers, with the majority located in Texas. This ongoing influx of residential, commercial, and industrial customers directly contributes to increased natural gas sales and operating income.
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Share Issuance
- Atmos Energy shareholders approved an increase in authorized common shares from 200 million to 400 million in early February 2026, providing flexibility for future capital raising and funding capital expenditures through potential equity issuance.
- As of December 31, 2025, approximately $1.1 billion in equity forward commitments were outstanding.
- The company settled $472 million through equity forward agreements in the first quarter of fiscal 2026.
Inbound Investments
- Capital International Investors increased its stake in Atmos Energy by 359,780 shares to 10,965,840 shares in the third quarter (ending December 31, 2025), representing a 6.83% ownership valued at approximately $1.87 billion.
Capital Expenditures
- Atmos Energy projects capital expenditures of approximately $4.2 billion for fiscal year 2026, with over 85% allocated to enhancing system safety and reliability.
- The company invested $3.6 billion in capital expenditures in fiscal year 2025, with approximately 87% dedicated to safety and reliability projects, primarily pipeline replacement and modernization.
- Capital expenditures for fiscal year 2024 reached $2.9 billion, largely focused on improving the safety and reliability of its natural gas infrastructure.
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| Date | Ticker | Company | Category | Trade Strategy | 6M Fwd Rtn | 12M Fwd Rtn | 12M Max DD |
|---|---|---|---|---|---|---|---|
| 03312026 | SRE | Sempra | Insider | Insider Buys 45DStrong Insider BuyingCompanies with multiple insider buys in the last 45 days | -2.1% | -2.1% | -4.9% |
| 12122025 | CTRI | Centuri | Insider | Insider Buys | Low D/EStrong Insider BuyingCompanies with strong insider buying in the last 1 month, positive operating income and reasonable debt / market cap | 41.5% | 41.5% | -5.5% |
| 11212025 | PEG | Public Service Enterprise | Monopoly | MY | Getting CheaperMonopoly-Like with P/S DeclineLarge cap with monopoly-like margins or cash flow generation and getting cheaper based on P/S multiple | 2.1% | 2.1% | -4.0% |
| 09302022 | ATO | Atmos Energy | Quality | Q | Momentum | UpsideQuality Stocks with Momentum and UpsideBuying quality stocks with strong momentum but still having room to run | 11.7% | 6.7% | -3.7% |
Research & Analysis
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Peer Comparisons
| Peers to compare with: |
Financials
| Median | |
|---|---|
| Name | |
| Mkt Price | 85.52 |
| Mkt Cap | 28.7 |
| Rev LTM | 8,117 |
| Op Inc LTM | 2,006 |
| FCF LTM | -2,332 |
| FCF 3Y Avg | -1,483 |
| CFO LTM | 2,238 |
| CFO 3Y Avg | 2,151 |
Growth & Margins
| Median | |
|---|---|
| Name | |
| Rev Chg LTM | 8.6% |
| Rev Chg 3Y Avg | 2.3% |
| Rev Chg Q | 4.9% |
| QoQ Delta Rev Chg LTM | 1.3% |
| Op Inc Chg LTM | 10.8% |
| Op Inc Chg 3Y Avg | 10.8% |
| Op Mgn LTM | 26.0% |
| Op Mgn 3Y Avg | 26.1% |
| QoQ Delta Op Mgn LTM | 0.1% |
| CFO/Rev LTM | 34.2% |
| CFO/Rev 3Y Avg | 35.5% |
| FCF/Rev LTM | -23.0% |
| FCF/Rev 3Y Avg | -20.5% |
Valuation
| Median | |
|---|---|
| Name | |
| Mkt Cap | 28.7 |
| P/S | 3.4 |
| P/Op Inc | 13.5 |
| P/EBIT | 12.3 |
| P/E | 23.5 |
| P/CFO | 11.1 |
| Total Yield | 6.4% |
| Dividend Yield | 2.5% |
| FCF Yield 3Y Avg | -5.9% |
| D/E | 0.7 |
| Net D/E | 0.7 |
Returns
| Median | |
|---|---|
| Name | |
| 1M Rtn | -5.2% |
| 3M Rtn | 5.1% |
| 6M Rtn | 2.8% |
| 12M Rtn | 14.7% |
| 3Y Rtn | 57.9% |
| 1M Excs Rtn | -14.3% |
| 3M Excs Rtn | -1.6% |
| 6M Excs Rtn | -4.8% |
| 12M Excs Rtn | -19.9% |
| 3Y Excs Rtn | -22.2% |
Comparison Analyses
Price Behavior
| Market Price | $180.87 | |
| Market Cap ($ Bil) | 29.4 | |
| First Trading Date | 12/28/1983 | |
| Distance from 52W High | -5.9% | |
| 50 Days | 200 Days | |
| DMA Price | $185.91 | $172.56 |
| DMA Trend | up | up |
| Distance from DMA | -2.7% | 4.8% |
| 3M | 1YR | |
| Volatility | 16.2% | 15.4% |
| Downside Capture | -0.11 | -0.01 |
| Upside Capture | 9.47 | 15.89 |
| Correlation (SPY) | -8.3% | -1.8% |
| 1M | 2M | 3M | 6M | 1Y | 3Y | |
|---|---|---|---|---|---|---|
| Beta | -0.21 | -0.01 | -0.12 | -0.07 | -0.03 | 0.19 |
| Up Beta | -0.25 | -0.21 | -0.23 | -0.18 | -0.16 | 0.16 |
| Down Beta | 0.61 | 0.12 | 0.24 | -0.14 | -0.08 | 0.20 |
| Up Capture | 3% | 3% | 8% | 9% | 11% | 9% |
| Bmk +ve Days | 15 | 22 | 31 | 66 | 141 | 428 |
| Stock +ve Days | 11 | 22 | 39 | 76 | 148 | 426 |
| Down Capture | 7% | 9% | -53% | -14% | -7% | 27% |
| Bmk -ve Days | 4 | 18 | 30 | 56 | 108 | 321 |
| Stock -ve Days | 11 | 21 | 24 | 48 | 103 | 326 |
[1] Upside and downside betas calculated using positive and negative benchmark daily returns respectively
Based On 1-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with ATO | |
|---|---|---|---|---|
| ATO | 13.7% | 15.7% | 0.63 | - |
| Sector ETF (XLU) | 14.0% | 14.4% | 0.69 | 70.4% |
| Equity (SPY) | 29.0% | 12.5% | 1.83 | -2.5% |
| Gold (GLD) | 39.8% | 27.0% | 1.22 | 10.3% |
| Commodities (DBC) | 50.6% | 18.0% | 2.21 | -5.8% |
| Real Estate (VNQ) | 13.0% | 13.5% | 0.66 | 48.4% |
| Bitcoin (BTCUSD) | -17.4% | 42.1% | -0.34 | -2.9% |
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Based On 5-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with ATO | |
|---|---|---|---|---|
| ATO | 14.6% | 18.5% | 0.64 | - |
| Sector ETF (XLU) | 9.3% | 17.3% | 0.40 | 77.7% |
| Equity (SPY) | 12.8% | 17.1% | 0.59 | 33.9% |
| Gold (GLD) | 20.9% | 17.9% | 0.95 | 17.5% |
| Commodities (DBC) | 13.8% | 19.1% | 0.59 | 10.3% |
| Real Estate (VNQ) | 3.4% | 18.8% | 0.08 | 60.3% |
| Bitcoin (BTCUSD) | 7.0% | 56.0% | 0.34 | 11.1% |
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Based On 10-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with ATO | |
|---|---|---|---|---|
| ATO | 12.2% | 21.2% | 0.52 | - |
| Sector ETF (XLU) | 9.8% | 19.2% | 0.44 | 82.1% |
| Equity (SPY) | 15.1% | 17.9% | 0.72 | 44.8% |
| Gold (GLD) | 13.4% | 15.9% | 0.69 | 13.5% |
| Commodities (DBC) | 9.3% | 17.8% | 0.44 | 12.1% |
| Real Estate (VNQ) | 5.8% | 20.7% | 0.24 | 63.2% |
| Bitcoin (BTCUSD) | 67.8% | 66.9% | 1.07 | 7.1% |
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Earnings Returns History
Expand for More| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 5/6/2026 | -1.6% | ||
| 2/3/2026 | 1.8% | 3.2% | 10.4% |
| 11/5/2025 | 1.7% | 3.0% | -2.6% |
| 8/6/2025 | 3.6% | 6.3% | 6.6% |
| 5/7/2025 | -0.9% | -6.4% | -5.9% |
| 2/4/2025 | 1.9% | 1.9% | 3.4% |
| 11/6/2024 | 1.8% | 5.5% | 2.8% |
| 8/7/2024 | -0.9% | 0.4% | 2.7% |
| ... | |||
| SUMMARY STATS | |||
| # Positive | 14 | 12 | 14 |
| # Negative | 11 | 12 | 10 |
| Median Positive | 1.8% | 3.1% | 3.7% |
| Median Negative | -0.9% | -2.3% | -3.6% |
| Max Positive | 8.4% | 8.9% | 14.8% |
| Max Negative | -2.9% | -6.4% | -5.9% |
SEC Filings
Expand for More| Report Date | Filing Date | Filing |
|---|---|---|
| 03/31/2026 | 05/06/2026 | 10-Q |
| 12/31/2025 | 02/03/2026 | 10-Q |
| 09/30/2025 | 11/14/2025 | 10-K |
| 06/30/2025 | 08/06/2025 | 10-Q |
| 03/31/2025 | 05/07/2025 | 10-Q |
| 12/31/2024 | 02/04/2025 | 10-Q |
| 09/30/2024 | 11/18/2024 | 10-K |
| 06/30/2024 | 08/07/2024 | 10-Q |
| 03/31/2024 | 05/08/2024 | 10-Q |
| 12/31/2023 | 02/06/2024 | 10-Q |
| 09/30/2023 | 11/14/2023 | 10-K |
| 06/30/2023 | 08/02/2023 | 10-Q |
| 03/31/2023 | 05/03/2023 | 10-Q |
| 12/31/2022 | 02/07/2023 | 10-Q |
| 09/30/2022 | 11/14/2022 | 10-K |
| 06/30/2022 | 08/03/2022 | 10-Q |
Recent Forward Guidance [BETA]
Latest: Q2 2026 Earnings Reported 5/6/2026
| Forward Guidance | Guidance Change | ||||||
|---|---|---|---|---|---|---|---|
| Metric | Low | Mid | High | % Chg | % Delta | Change | Prior |
| 2026 EPS | 8.4 | 8.45 | 8.5 | 2.4% | Raised | Guidance: 8.25 for 2026 | |
| 2026 Capital Expenditures | 4.20 Bil | 0 | Affirmed | Guidance: 4.20 Bil for 2026 | |||
| 2026 Dividends | 4 | 0 | Affirmed | Guidance: 4 for 2026 | |||
Prior: Q1 2026 Earnings Reported 2/3/2026
| Forward Guidance | Guidance Change | ||||||
|---|---|---|---|---|---|---|---|
| Metric | Low | Mid | High | % Chg | % Delta | Change | Prior |
| 2026 EPS | 8.15 | 8.25 | 8.35 | 0 | Affirmed | Guidance: 8.25 for 2026 | |
| 2026 Capital Expenditures | 4.20 Bil | 0 | Affirmed | Guidance: 4.20 Bil for 2026 | |||
| 2026 Dividends | 4 | 0 | Affirmed | Guidance: 4 for 2026 | |||
ATO Trade Sentinel
OVERWEIGHT (Score 9-10)
CONVICTION RATIONALE
The probability-adjusted skew is highly attractive at over 2.0x. The analysis indicates that while the stock is fairly valued, the market underappreciates the durability of its growth algorithm in a strong sector environment. The high visibility of the 'Alpha Driver' (rate base growth) is more powerful than the medium-probability 'Anti-Alpha' (regulatory risk), creating a compelling asymmetric risk/reward profile.
STOCK ARCHETYPE
Mature Cash CowAtmos Energy fits the 'Mature Cash Cow' archetype due to its status as a fully regulated utility with predictable, cost-plus-based revenue streams, high capital intensity, and a focus on generating consistent returns for shareholders through dividends and steady earnings growth.
INVESTMENT THESIS
The primary driver for shareholder return is the systematic expansion of Atmos Energy's regulated rate base, fueled by significant capital investment in its infrastructure within demographically advantaged territories, particularly Texas. This growth is highly visible and supported by a constructive regulatory framework.
- Planned investments of approximately $26 billion between fiscal years 2026-2030.
- Fiscal 2026 capital expenditure guidance is approximately $4.2 billion, with over 85% focused on safety and reliability.
- Population growth in key Texas service areas exceeds 1.5% annually, supplemented by industrial expansion from data centers.
- Long-term earnings per share growth target of 6% to 8% annually, driven by rate base growth.
PRIMARY RISK
The greatest friction to the investment thesis is the risk of less favorable outcomes in pending and future rate cases. A shift to a more stringent regulatory environment, particularly in Texas, could lead to lower-than-expected revenue increases and/or a reduction in the allowed Return on Equity (ROE), compressing the company's primary earnings driver.
- A $35.8 million Dallas Area Rate Review (DARR) mechanism case is currently pending with the Texas Railroad Commission.
- Historical precedent: A May 2025 West Texas rate case settlement resulted in receiving only $30.2 million of a $66.1 million request and a cut in the approved ROE to 9.8% from a requested 10.85%.
| KPI | Threshold | Rationale |
|---|---|---|
| Capital Expenditures | Meet or Exceed ~$4.2B in FY2026 | This is the primary leading indicator for rate base growth, which is the direct driver of future earnings. |
| Dallas Area Rate Review (DARR) Outcome | Approved Revenue >$25M & Approved ROE >9.75% | Serves as the most immediate barometer for the health of the Texas regulatory environment, which is critical to the long-term thesis. |
| Annual Customer Growth | Maintain >50,000 Net New Customers | Confirms the continuation of the secular population and business growth tailwind in core service territories. |
Regulatory Risk vs. Regulated Growth Certainty
BULL VIEW
Consistent 6-8% EPS growth is locked in by a $26B capex plan in supportive states, making regulatory headwinds manageable noise within a durable compounding story.
CORE TENSION
Can Atmos's predictable rate base growth, driven by aggressive capex, offset the risk of adverse regulatory decisions and rising external costs (interest rates, commodity prices)?
PREVAILING SENTIMENT
The pending $35.8 million Dallas Area Rate Review (DARR) case is the most immediate, tangible event that will tip the scales between the bull and bear case.
BEAR VIEW
A less favorable outcome in the pending Dallas rate case could signal a tougher regulatory environment, compressing returns on invested capital and breaking the growth algorithm.
| Timeline | Event & Metric To Watch |
|---|---|
Next 1-3 Months | Dallas Area Rate Review (DARR) Ruling Watch: Final approved revenue increase vs. the $35.8M requested and the approved Return on Equity (ROE) vs. the typical 9.75-9.8% range. |
Early May 2026 | Q2 2026 Earnings Call Watch: Updates to the full-year capital expenditure guidance. Any deviation from the ~$4.2B plan signals a change in the core growth algorithm. |
Anytime | Natural Gas Price Volatility Event Watch: Henry Hub front-month natural gas contract price. A sustained move above $4.75/MMBtu is the key threshold. |
Ongoing / H1 2026 | Federal Reserve Interest Rate Decision Watch: 10-Year U.S. Treasury Yield. A break and hold above 4.5% would trigger sector-wide de-rating. |
| Date | Event | Stock Impact |
|---|---|---|
2025-08-07 | Q3 2025 Earnings Report Details: Reported Q3 EPS of $1.16, in-line with estimates, and raised the lower end of its full-year 2025 guidance, signaling confidence in its operational execution. | Rose significantly by 3.63% $155.31 -> $160.95 |
2025-10-15 | Announced $600M Senior Notes Offering Details: Atmos priced $600 million of 5.45% senior notes due 2055 to fund its capital expenditure program, demonstrating continued access to capital markets. | Flat (0.87%) $176.63 -> $178.16 |
2025-11-06 | Q4 2025 Earnings & FY26 Guidance Details: Reported Q4 EPS of $1.04, beating estimates of $0.98. Initiated FY26 EPS guidance of $8.15-$8.35 and announced a 14.9% dividend increase. | Rose significantly by 1.67% $171.60 -> $174.47 |
2026-02-03 | Q1 2026 Earnings Release Details: Atmos reported Q1 EPS of $2.44, beating consensus estimates of $2.41. The company affirmed its fiscal 2026 guidance and highlighted a $1B capital expenditure for the quarter. | Modest 1.37% gain $166.52 -> $168.81 |
Position Sizing
4% - 6%
NORMAL
Volatility is stable and compressing. While Neutral sentiment and a premium valuation prevent an aggressive position, the high visibility and stable moat argue against a minimal one. This fits a standard allocation.
Diversification Alternatives
NFG
INDUSTRYOffers a more diversified model with E&P exposure, but this comes with higher commodity price risk and significant legal/environmental overhangs that ATO does not share.
WTRG
SECTORProvides exposure to the regulated utility space through water, which has similar characteristics but avoids direct natural gas commodity and regulatory risk.
Atmos Energy is a regulated utility executing a long-term, large-scale capital expenditure plan to modernize its natural gas infrastructure, which grows its regulated asset base and directly drives ~6-8% annual EPS and dividend growth.
Filter all news through the lens of capital expenditure execution and regulatory outcomes. The core thesis is that spending on safety and reliability directly translates to rate base growth, which regulators then allow a return on.
Favorable rate case outcomes in key states (especially Texas); announcements of accelerated or expanded capital expenditure plans (currently ~$4.2B for FY2026); constructive new legislation (like Texas HB 4384) that improves cost recovery timeliness. [9, 11]
Adverse regulatory decisions (rate case denials, ROE reductions); significant project delays or cost overruns on major pipeline projects; rising interest rates that increase financing costs and make utility dividends less attractive relative to bonds.
Short-term fluctuations in natural gas commodity prices (costs are largely passed through to customers); quarterly revenue missing/beating estimates (EPS and rate base growth are the key metrics); minor winter storm operational issues (unless they result in major unrecoverable costs like Winter Storm Uri).
Repricing Catalyst
The primary catalyst is the consistent execution of its multi-year, ~$26 billion capital investment plan through FY2030, focused on safety and modernization. [3] This spending systematically grows the company's 'rate base' (the asset value on which it's allowed to earn a regulated profit), leading to predictable, regulator-approved rate increases and supporting a 6-8% long-term EPS and dividend growth target. [2, 12, 13]
Gas Distribution to Homes & Businesses
$3878000.0B TTM (79% of Total) · 33% MarginWhat It Is
Regulated natural gas delivery services to residential, commercial, public-authority, and industrial customers across eight states.
Who Pays & How
Over 3.4 million customers pay a monthly, tariff-based rate for the delivery of natural gas. [9] They pay because Atmos owns and operates the essential, monopolistic physical pipeline infrastructure required to heat homes and power businesses in its service territories. Switching costs are effectively infinite due to the lack of alternative gas grids.
Competition
Gas Pipeline & Storage
$1007000.0B TTM (21% of Total) · 33% MarginWhat It Is
Natural gas transportation and storage services via ~5,700 miles of intrastate pipeline in Texas (Atmos Pipeline-Texas or APT) and five underground storage reservoirs. [10]
Who Pays & How
Local distribution companies (including Atmos's own distribution segment), industrial customers, and power plants pay tariff-based rates to transport and store natural gas. They pay for access to a critical infrastructure network that connects gas supply basins to major market hubs.
Competition
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