ATO operates in regulated gas distribution, granting it exclusive service territories. This regulatory structure limits direct competition, ensuring a stable customer base and predictable revenue streams.

↑Essential Service Demand

Natural gas is a critical energy source for heating and industrial processes. Demand for this essential service remains relatively inelastic, providing a consistent revenue foundation for ATO.

↑Capital Investment Pipeline

ATO's significant capital expenditure plan ($4.2B FY26) focuses on infrastructure upgrades. This investment supports earnings growth and dividend increases, reinforcing its long-term viability and shareholder value.

INVESTMENT RISKS

↓Aging Infrastructure

The company faces challenges with aging gas infrastructure, requiring substantial ongoing investment for maintenance and upgrades. This can lead to unexpected costs and operational disruptions.

↓Clean Energy Competition

ATO operates in an industry facing increasing competition from alternative clean energy sources. This shift in energy preferences could gradually erode its market share and demand over time.

↓Regulatory Hurdles

ATO's regulated nature means it is subject to rate approvals and regulatory changes. Unfavorable decisions or delays in rate adjustments can impact profitability and growth prospects.

Base case

ATO base case PE valuation

A base case PE valuation for ATO estimates a fair value of about $203.21 per share, against a current price of $170.32. The model assumes 9.2% annual earnings growth, a 21x target PE multiple, and a 10% discount rate.

Intrinsic Value

$203.21

Margin of safety

+16.2%

Expected annual return

+3.6%

Base case assumptions: 9.2% annual earnings growth, 21x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-15.

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.

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Company 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)

21.1x

PEG Ratio

1.59

Earnings Yield

4.75%

ROE (TTM)

9.6%

Revenue/Share (TTM)

$29.32

Dividend Yield

2.27%

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 21.1x combined with a PEG ratio of 1.59 provides a growth-adjusted perspective. A PEG near 1.0 suggests the PE ratio is reasonably justified by 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 (21.1x) against the Regulated Gas median to assess relative pricing, (2) check the PEG ratio (1.59) 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 1.59, calculated by dividing the PE ratio (21.1x) by the expected earnings growth rate. A PEG near 1.0 suggests the stock is fairly priced relative to growth. 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

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P/E and DCF value ATO with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.

Price as of 2026-06-15. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.

This is an estimate, not investment advice.