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1. Company Snapshot

1.a. Company Description

Atmos Energy Corporation, together with its subsidiaries, engages in the regulated natural gas distribution, and pipeline and storage businesses in the United States.It operates through two segments, Distribution, and Pipeline and Storage.The Distribution segment is involved in the regulated natural gas distribution and related sales operations in eight states.


This segment distributes natural gas to approximately three million residential, commercial, public authority, and industrial customers.As of September 30, 2021, it owned 71,921 miles of underground distribution and transmission mains.The Pipeline and Storage segment engages in the pipeline and storage operations.


This segment transports natural gas for third parties and manages five underground storage reservoirs in Texas; and provides ancillary services to the pipeline industry, including parking arrangements, lending, and inventory sales.As of September 30, 2021, it owned 5,699 miles of gas transmission lines.Atmos Energy Corporation was founded in 1906 and is headquartered in Dallas, Texas.

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1.b. Last Insights on ATO

Atmos Energy Corporation's recent performance was driven by strong Q1 2025 earnings and revenue growth. The company beat earnings estimates with $2.23 per share, outpacing the expected $2.20 per share. This success can be attributed to strategic investments and customer growth, as mentioned in the earnings release. Additionally, the company's ability to increase shareholder value and better debt management are strong indicators of its growth prospects. Furthermore, the recent share buyback activity suggests a commitment to returning value to shareholders, reducing the number of outstanding shares and increasing earnings per share.

1.c. Company Highlights

2. Atmos Energy's Q1 FY2026 Earnings: A Strong Start to the Year

Atmos Energy reported a robust financial performance in the first quarter of fiscal 2026, with net income reaching $403 million or $2.44 per diluted share, beating analyst estimates of $2.41 per share. The company's capital expenditures totaled $1 billion, with over 85% of these investments focused on enhancing the safety and reliability of its distribution, transmission, and underground storage systems. The strong earnings performance was a 9.4% increase over the prior year quarter, driven by the company's continued investment in its infrastructure.

Publication Date: Feb -12

📋 Highlights
  • Q1 Net Income & EPS Growth:: Fiscal 2026 first-quarter net income reached $403M ($2.44/diluted share), up 9.4% from prior year.
  • Capital Expenditures Focus:: $1B spent on safety/reliability upgrades, with 85% allocated to distribution, transmission, and storage systems.
  • Rebased Earnings Guidance:: Fiscal 2026 EPS guidance adjusted to $8.15–$8.35/share post-Texas House Bill 4384 passage.
  • Infrastructure Progress:: 55 miles of 36-inch pipeline installed and 13 miles of Line WA Loop project activated in Atmos Pipeline-Texas.
  • Customer Satisfaction & Support:: Achieved 98% customer satisfaction, aiding 11,000 customers with $3M in financial assistance.

Operational Highlights

The company made significant progress in its Atmos Pipeline-Texas division, completing the installation of 55 miles of 36-inch pipeline and placing 13 miles of the Line WA Loop project into service. Additionally, the company enhanced its supply optionality, reliability, and system versatility with the completion of two interconnect projects. The company's customer support associates and service technicians continued to provide exceptional customer service, achieving customer satisfaction ratings of 98% for the quarter.

Guidance and Outlook

Atmos Energy rebased its fiscal 2026 guidance to reflect the passage of Texas House Bill 4384, with earnings per share guidance in the range of $8.15 to $8.35 per share. The company remains on track to achieve its capital spending plan of $4.2 billion. As Christopher Forsythe noted, "Our first quarter performance has us well positioned to achieve our rebased fiscal 2026 earnings per share guidance."

Valuation and Growth Prospects

With a P/E Ratio of 22.91 and an expected revenue growth rate of 8.6% next year, Atmos Energy's valuation appears reasonable. The company's ROE of 9.2% and ROIC of 4.16% indicate a stable and profitable business model. The dividend yield of 2.05% provides a relatively stable source of return for investors. Analysts should continue to monitor the company's progress in achieving its guidance and its ability to maintain its dividend payout.

Regulatory Update

The company is working with regulators in various states, including Mississippi, where it is implementing a new tariff that reflects the order issued last year. The company is also evaluating the impact of shifting from a forward look to a historical look, which may potentially mitigate or reduce lag going forward.

3. NewsRoom

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Calton & Associates Inc. Makes New $901,000 Investment in Atmos Energy Corporation $ATO

Feb -16

Source: defenseworld.net

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Atmos Energy Corp (ATO) Q1 2026 Earnings Call Highlights: Strong Customer Growth and Strategic Investments Drive Performance

Feb -04

Source: gurufocus.com

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Atmos Energy Q1 Earnings Beat Estimates, Revenues Increase Y/Y

Feb -04

Source: zacks.com

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Atmos Energy Corporation (ATO) Q1 2026 Earnings Call Transcript

Feb -04

Source: seekingalpha.com

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Atmos (ATO) Reports Q1 Earnings: What Key Metrics Have to Say

Feb -04

Source: zacks.com

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Atmos Energy (ATO) Q1 Earnings Surpass Estimates

Feb -04

Source: zacks.com

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Atmos Energy posts higher quarterly profit on strength in gas distribution, pipelines

Feb -03

Source: reuters.com

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Atmos Energy Corporation Reports Earnings for Fiscal 2026 First Quarter; Affirms Fiscal 2026 Guidance

Feb -03

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.82%)

6. Segments

Distribution

Expected Growth: 4.83%

Atmos Energy's 4.83% distribution growth is driven by its consistent operating performance, strong cash flow generation, and a solid balance sheet. The company's regulated business model provides a stable earnings base, while its ongoing capital investment program and organic growth initiatives support long-term distribution growth.

Pipeline and Storage

Expected Growth: 4.65%

Atmos Energy's Pipeline and Storage segment growth of 4.65% is driven by increasing demand for natural gas, expansion of existing infrastructure, and strategic acquisitions. Additionally, investments in pipeline modernization and safety initiatives contribute to growth. Furthermore, favorable regulatory environments and rising production from shale plays also support segment growth.

7. Detailed Products

Natural Gas Distribution

Atmos Energy Corporation provides natural gas distribution services to residential, commercial, and industrial customers.

Pipeline and Storage Services

The company offers pipeline and storage services to transport and store natural gas for its customers.

Natural Gas Marketing

Atmos Energy Corporation markets and sells natural gas to customers, including municipalities, utilities, and industrial customers.

Intrastate Pipeline Services

The company provides intrastate pipeline services, transporting natural gas within specific states.

8. Atmos Energy Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Atmos Energy Corporation is medium due to the availability of alternative energy sources such as solar and wind power. However, the high cost of switching to these alternatives and the lack of infrastructure in some areas reduce the threat.

Bargaining Power Of Customers

The bargaining power of customers is low due to the lack of alternative energy providers in many areas, giving Atmos Energy Corporation a significant market share and pricing power.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium due to the presence of multiple suppliers of natural gas and other energy sources. However, the high demand for these resources and the limited number of suppliers give them some bargaining power.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the energy industry, including the need for significant capital investment and regulatory approvals.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of several established energy companies competing for market share, leading to aggressive pricing and marketing strategies.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 38.80%
Debt Cost 3.95%
Equity Weight 61.20%
Equity Cost 7.23%
WACC 5.95%
Leverage 63.41%

11. Quality Control: Atmos Energy Corporation passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
ONE Gas

A-Score: 6.4/10

Value: 6.4

Growth: 4.4

Quality: 4.8

Yield: 6.0

Momentum: 7.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Atmos Energy

A-Score: 6.3/10

Value: 4.9

Growth: 5.0

Quality: 5.7

Yield: 4.0

Momentum: 8.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
New Jersey Resources

A-Score: 6.3/10

Value: 6.3

Growth: 4.3

Quality: 4.4

Yield: 8.0

Momentum: 4.5

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
NiSource

A-Score: 6.2/10

Value: 5.3

Growth: 3.3

Quality: 4.7

Yield: 6.0

Momentum: 8.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Southwest Gas Holdings

A-Score: 6.1/10

Value: 4.3

Growth: 5.2

Quality: 3.6

Yield: 7.0

Momentum: 7.0

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
New Fortress Energy

A-Score: 3.9/10

Value: 10.0

Growth: 6.4

Quality: 3.4

Yield: 3.0

Momentum: 0.0

Volatility: 0.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

181.1$

Current Price

181.1$

Potential

-0.00%

Expected Cash-Flows