Atmos Energy Corporation (ATO) Stock Valuation — PE Analysis
Regulated Gas · NYSE
Current Price
$175.36
PE Ratio (TTM)
21.3x
Intrinsic Value
$204.25
+14.1% margin of safety
COMPETITIVE MOAT
↑Regulated Monopoly Infrastructure
ATO operates extensive natural gas distribution networks, protected by regulatory approvals. This creates high barriers to entry for competitors in its service territories.
↑Essential Service Demand
Natural gas is a critical energy source for heating and industrial processes. Demand for this essential service remains relatively inelastic, providing stable revenue streams.
↑Long-Term Growth Outlook
The company's credible 7%-8% long-term growth outlook, driven by infrastructure investment and modernization, supports its financial stability and dividend sustainability.
INVESTMENT RISKS
↓Regulatory Uncertainty and Rate Cases
Changes in regulatory frameworks or unfavorable outcomes in rate cases can impact ATO's ability to recover costs and achieve its desired returns.
↓Commodity Price Volatility
While largely a pass-through, significant fluctuations in natural gas prices can still affect volumes and operational costs, creating short-term financial pressures.
↓Environmental and Climate Change Policies
Increasingly stringent environmental regulations and policies aimed at reducing carbon emissions could necessitate costly transitions away from natural gas.
Base case
ATO base case PE valuation
A base case PE valuation for ATO estimates a fair value of about $204.25 per share, against a current price of $175.36. The model assumes 8.4% annual earnings growth, a 22x target PE multiple, and a 10% discount rate.
Intrinsic Value
$204.25
Margin of safety
+14.1%
Expected annual return
+3.1%
Base case assumptions: 8.4% annual earnings growth, 22x target PE, 10% discount rate, 5 year projection. Data as of 2026-07-30.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the ATO PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Atmos Energy Corporation respond.
Open PE Calculator for ATOCompany Overview
Atmos Energy Corporation, alongside its subsidiaries, is a U.S.-based enterprise primarily involved in the regulated distribution of natural gas, as well as operating pipeline and storage facilities. The company functions through two core divisions: Distribution, and Pipeline and Storage. The Distribution division manages the regulated delivery and associated sales of natural gas across eight states. This division supplies natural gas to approximately three million customers, encompassing homeowners, businesses, public agencies, and industrial clients. By September 30, 2021, its extensive infrastructure comprised 71,921 miles of subterranean distribution and transmission lines. Conversely, the Pipeline and Storage division focuses on pipeline and storage activities. It is responsible for transporting natural gas on behalf of other entities and oversees five underground storage facilities located in Texas. Additionally, it offers various support services to the pipeline sector, such as gas parking, lending, and inventory transactions. As of September 30, 2021, this division maintained a network of 5,699 miles of gas transmission lines. Established in 1906, Atmos Energy Corporation maintains its principal office in Dallas, Texas.
Financial Metrics — ATO PE Stock Valuation Data
PE Ratio (TTM)
21.3x
PEG Ratio
1.61
Earnings Yield
4.61%
ROE (TTM)
9.6%
Revenue/Share (TTM)
$29.32
Dividend Yield
2.21%
Debt/Equity
0.65x
Frequently Asked Questions
What is the PE ratio of ATO?
The trailing twelve-month PE ratio of ATO reflects how much investors pay per dollar of Atmos Energy Corporation's earnings. This metric is most useful when compared to Regulated Gas peers and the company's own historical range.
Is ATO overvalued based on PE ratio?
ATO's PE of 21.3x combined with a PEG ratio of 1.61 provides a growth-adjusted perspective. A PEG near 1.0 means the P/E is roughly in line with the earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Regulated Gas, a DCF analysis may be more appropriate.
How do I value ATO stock using PE ratio?
To value Atmos Energy Corporation using PE: (1) Compare the current PE (21.3x) against the Regulated Gas median to assess relative pricing, (2) check the PEG ratio (1.61) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of ATO?
ATO's PEG ratio is 1.61, calculated by dividing the PE ratio (21.3x) by the expected earnings growth rate. A PEG near 1.0 means the P/E is roughly in line with the expected earnings growth rate. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for ATO stock valuation?
PE ratio gives a quick relative read — how ATO is priced versus Regulated Gas peers. DCF provides an absolute value based on projected free cash flows. For the most reliable valuation, use PE as a quick comparability screen and DCF for a deeper fundamental analysis. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See ATO DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Utilities valuationsP/E and DCF value ATO with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-07-30. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.