Regulated Gas · NYSE
Current Price
$185.71
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Atmos Energy Corporation with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
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.
ROIC (TTM)
4.6%
ROE (TTM)
9.2%
FCF Yield
-5.30%
Based on trailing twelve-month data, ATO shows a free cash flow per share of N/A and a ROIC of 4.6%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of -5.30% are important context metrics when evaluating ATO's stock valuation relative to peers.
The intrinsic value of ATO depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether ATO is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $185.71. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Atmos Energy Corporation: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Regulated Gas industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting ATO's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Atmos Energy Corporation, this means projecting how much free cash flow the Regulated Gas will produce over the next 5-10 years, then discounting those amounts to today's dollars. ATO's ROIC of 4.6% suggests the company may face challenges generating returns above its cost of capital.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For ATO, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
