Attractive Price-to-Book Ratio
Reasonable PE Ratio
Strong Net Profit Margin
Healthy Gross and Operating Profit Margins
Low Debt Levels
Strong Liquidity Ratios
Strong Financial Performance
Customer Growth
High Customer Satisfaction
Significant Capital Investments
Regulatory Support for Future Income
Long-term Growth Strategy
Diverse Customer Base
High Price-to-Sales Ratio
Negative Price-to-Free Cash Flow Ratio
Return on Equity Below Industry Standards
Negative Free Cash Flow
Increased Operational Expenses
Market Uncertainty
Atmos Energy demonstrates robust business quality through strong financial results, customer growth, and high satisfaction ratings. However, rising operational expenses may pose challenges. Looking ahead, the company shows promising future prospects supported by regulatory measures and a significant capital investment strategy, although market uncertainties remain a potential risk.
Analysis Date: February 5, 2025
Last Updated: March 11, 2025
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$180.15
Current Market Price: $150.11
IV/P Ratio: 1.20x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
17.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for ATO
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (21.32)
P/B ratio ≤ 1.5 (0.91)
Current ratio ≥ 2.0 (1.56x)
Long-term debt < Net current assets (0.00x)
Margin of safety (17.0%)
ATO does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
The net profit margin of 25.90% indicates a strong ability to convert revenue into profit, reflecting efficient cost management.
The gross profit margin of 51.69% and operating profit margin of 33.85% are significantly above average, indicating effective pricing strategies and cost control.
The return on equity (ROE) of 7.06% may be lower than industry benchmarks, indicating less efficient use of equity to generate profits.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
7.06%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-16)
Return on Assets (ROA)
Measures how efficiently a company uses its assets to generate profits
1.20%
Higher values indicate better asset utilization
TTM (as of 2025-04-16)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
51.69%
Higher values indicate better efficiency in production
TTM (as of 2025-04-16)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
25.90%
Higher values indicate better overall profitability
TTM (as of 2025-04-16)
The debt-to-equity ratio of 0.00046 indicates a very low level of debt compared to equity, suggesting strong financial stability and lower risk.
With a current ratio of 1.56 and a quick ratio of 1.56, the company has sufficient short-term assets to cover its liabilities, indicating good liquidity health.
The free cash flow per share of -8.24 points to negative cash generation, which could pose risks to future operations and investment.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.00x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q1 2025
Current Ratio
Current assets divided by current liabilities
1.56x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q1 2025
Atmos Energy reported a first-quarter net income of $352 million, translating to $2.23 per diluted share, marking a 7.2% increase over the prior year. This indicates solid financial stability and profitability.
The company added over 59,000 new customers in the last year, showcasing strong demand for its services. This growth is further supported by favorable economic conditions in Texas, which added nearly 284,000 jobs, a 2% annual growth rate.
Atmos Energy was ranked number one in customer satisfaction among mid-sized gas utilities in the Midwest for the third consecutive year by JD Power, indicating strong customer loyalty and service quality.
The company invested $891 million in capital spending during the first fiscal quarter to support system modernization and growth, indicating a commitment to improving infrastructure.
Atmos Energy experienced a $41 million increase in consolidated operating and maintenance expenses, with significant drivers being employee-related costs and compliance spending, which could impact profitability in the near term.
The company has filed for approximately $126 million in annualized operating income increases, indicating proactive steps to maintain and enhance revenue through regulatory mechanisms.
Atmos Energy's capital spending plan of $3.7 billion shows a strategic commitment to expanding its infrastructure and service capabilities, which will support future growth.
The company continues to attract a variety of industrial customers, which diversifies its revenue streams and reduces reliance on any single customer segment.
The company acknowledges potential uncertainties in market conditions and tariffs that may affect costs and operations, which could hinder growth if not managed effectively.