ATMOS ENERGY CORP (ATO)

Price—Loading quote

AI: Overvalued

Price checkThe recent price demands steady growth while offering only a thin cash return.

A director’s August 11 open-market purchase establishes a recent transaction price of $167.5945, although it is not an official closing quote. Against management’s May fiscal-2026 earnings guidance of $8.40–$8.50 per share, that price equals about 19.8 times midpoint earnings. The indicated $4 annual dividend yields only 2.4%. This is demanding for a regulated utility that needs outside financing for construction. Continued growth could justify the premium, but the limited yield and financing burden provide little margin of safety, supporting an Overvalued verdict.

Big pictureRegulated growth is dependable, but construction spending consumes far more cash than operations produce.

Net income doubled from $601 million in fiscal 2020 to $1.20 billion in 2025, while earnings per share rose from $4.89 to $7.46. However, 2025 operating cash of $2.05 billion fell $1.51 billion short of $3.56 billion in construction spending. Free cash flow means cash left after operating and investing; here it is negative because Atmos is enlarging and replacing regulated infrastructure. Gas-cost timing and winter demand make cash flow uneven, but regulated rates reduce direct exposure to gas-price cycles and can eventually repay prudent investment.

Business strengthA sound capital mix supports expansion, though debt and share issuance steadily dilute owners.

At June 2026, Atmos had $15.26 billion of equity, $10.33 billion of debt and $521 million of cash, leaving equity near 60% of debt-plus-equity funding. That is reasonable for a utility, but debt has risen 126% since 2020. Shares outstanding increased 34%, from 125.9 million to 169.0 million, with no reported buybacks. Dilution has funded valuable growth so far because guided earnings per share remain about 73% above 2020. Still, June’s $700 million note issue adds roughly $33 million of annual interest before tax.

What could change the storyFaster rate recovery could justify the premium; financing strain or dilution would break it.

The bull case is continued recovery of infrastructure spending through customer rates: Atmos had implemented $135.3 million of annualized regulatory outcomes by March, and June-quarter earnings per share rose 23%. The bear case is that regulators delay recovery while debt costs and new shares absorb the returns. At nearly 20 times guided earnings, the price effectively assumes dependable mid-to-high single-digit per-share growth. Results above $8.50 with slower share growth and stable capitalization would strengthen the case; growth below 6%, rising leverage or dilution outpacing profit would weaken it.

$167.59 price considered

AI: News

Third-quarter earnings riseQuarterly profit climbed sharply, supporting full-year expectations despite heavy construction financing.

Atmos filed its June-quarter results on August 5, 2026. Revenue rose 4.8% to $879.1 million, net income increased 30% to $242.7 million, and earnings per share advanced 23% to $1.43. Nine-month earnings reached $7.34 per share, already 87% of May’s $8.45 guidance midpoint. This indicates that regulated-rate growth is outpacing dilution. Reliable evidence did not isolate the announcement’s stock effect; the broader market also declined on August 6, so later weakness cannot confidently be attributed to these results alone.

New debt funds constructionAtmos borrowed at a fixed rate to fund expansion, preserving liquidity but increasing interest costs.

On June 15, 2026, Atmos priced $700 million of 4.75% senior notes due in 2032 and received about $693.9 million after costs when the offering closed June 18. The notes add approximately $33.3 million of yearly interest before tax. This supports the company’s construction program without immediate additional stock issuance, but total debt reached $10.33 billion by June. The value impact depends on regulators allowing invested assets and financing costs to be recovered through customer rates.

Profit guidance increasedManagement raised its annual profit outlook, confirming that rate recovery was running ahead of plan.

On May 6, 2026, Atmos raised fiscal-year earnings guidance from $8.15–$8.35 to $8.40–$8.50 per share while retaining approximately $4.2 billion of planned construction spending. It also reported 60.9% equity capitalization, $4.1 billion of available liquidity and a $1 quarterly dividend. One market-data service measured a 1.57% decline from the day before to the day after the release, but timing alone does not establish that investors reacted negatively to the guidance.

Revenue

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2020

2021

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2025

Net income

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2025

Free cash flow

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Total cash / debt

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Financial statements

	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015	2014	2013	2012	2011	2010	2009	2008
Revenue	$4.70B	$4.17B	$4.28B	$4.20B	$3.41B	$2.82B	$2.90B	$3.12B	$2.76B	$2.45B	—	—	—	—	—	—	—	—
Gross profit	—	—	—	—	—	—	—	—	—	$1.74B	$1.68B	$1.58B	$1.41B	$1.32B	$1.30B	$1.31B	$1.32B	$1.32B
Operating expenses	—	—	—	—	—	—	—	—	—	$1.08B	$1.05B	$971.1M	$910.2M	$877.5M	$874.8M	$850.3M	$883.3M	$893.4M
Operating income	$1.56B	$1.36B	$1.07B	$921.0M	$905.0M	$824.1M	$746.1M	$727.9M	$735.6M	$657.2M	$612.2M	$611.3M	$501.9M	$446.2M	$426.0M	$463.8M	$436.4M	$427.9M
EBITDAderived	$2.29B	$2.03B	$1.67B	$1.46B	$1.38B	$1.25B	$1.14B	$1.09B	$1.06B	$950.3M	$887.0M	$865.3M	$737.0M	$683.8M	$649.8M	$672.4M	$648.4M	$628.3M
Net income	$1.20B	$1.04B	$885.9M	$774.4M	$665.6M	$601.4M	$511.4M	$603.1M	$396.4M	$350.1M	$315.1M	$289.8M	$243.2M	$216.7M	$207.6M	$205.8M	$191.0M	$180.3M
Basic EPSper diluted share	$7.54	$6.83	$6.10	$5.61	$5.12	$4.89	$4.36	$5.43	$3.73	$3.38	$3.09	$2.96	$2.68	$2.39	$2.28	$2.22	$2.08	—
Diluted EPSper diluted share	$7.46	$6.83	$6.10	$5.60	$5.12	$4.89	$4.35	$5.43	$3.73	$3.38	$3.09	$2.96	$2.64	$2.37	$2.27	$2.20	$2.07	—

Review source filings at SEC.gov ↗

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys1$362.2K disclosed value

Sells (SEC code S)2$2.34M disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
Dec 3, 2025Form 4	DONOHUE SEANDirector	SellCommon Stock	450	$171.15	$77.0K	876.6
May 14, 2025Form 4 · 10b5-1	COCKLIN KIM RDirector	SellCommon Stock	15.0K	$150.98	$2.26M	172.6K
Nov 11, 2024Form 4	Geiser EdwardDirector	BuyCommon Stock	2.5K	$144.89	$362.2K	2.6K

Review ownership filings at SEC.gov ↗

ATMOS ENERGY CORP (ATO)

Financial charts

Financial statements

Insider buys & sells