Atmos Energy Corporation was established in 1906 as Community Natural Gas Company. Headquartered in Texas, US, it is one of the largest natural-gas-only distributors in the US. Its regulated utility operations are divided into six main divisions, with the Mid-Tex Division being the largest, serving Dallas-Fort Worth and much of North-Central Texas. Beyond distribution, Atmos owns and operates one of Texas’s largest intrastate pipeline systems and 17 underground gas storage facilities.
The company continually invests in infrastructure, modernization and safety, working closely with regulators to ensure reliable natural gas service. Atmos Energy emphasizes safe operations, superior customer service, and sustainable growth within the communities it serves. Atmos Energy operates through two primary segments: The Distribution segment (64% of Q3 35 revenue), delivers natural gas to more than 3.4 million residential, commercial, and industrial customers across multiple states, prioritizing customer service and regional economic development.
The Pipeline & Storage segment (36% of FY 24 revenue), one of Texas’s largest intrastate natural gas pipeline systems, with its Atmos Pipeline–Texas (APT) division focusing on transporting and storing gas to serve distribution companies and other customers. The company has around 5,200 employees.
Segment growth drives Q3 25
Atmos Energy released its Q3 25 earnings on August 3, 2025, posting revenue of $839m, with a 19.5% y/y growth, primarily driven by higher income in the pipeline and storage segment, increased distribution volumes, and continued customer growth. EBITDA rose by 13.5% y/y to $445m, however its margin contracted by 280bp to 53%. Moreover, net income increased by 12.1% y/y to $186m.
Guidance raised
Atmos Energy anticipates that the adoption of new Texas legislation will result in a projected increase of approximately $0.10 to expected EPS in Q4 25. In addition to this impact, the company’s updated guidance also incorporates its expectations for APT’s through-system business during Q4 25 and improvements in pass-through collections experience. Consequently, as announced, Atmos Energy has revised its FY 25 diluted EPS guidance to a new range of $7.35 to $7.45, up from the previous range of $7.20 to $7.30.
The company has also confirmed its FY 25 capex guidance at approximately $3.7bn. While management is still finalizing the five-year plan, current projections suggest that earnings per share are expected to continue growing at an annual rate of 6% to 8% in the foreseeable future.
Robust CFO growth
Atmos Energy has posted a revenue CAGR of 6.9% over FY 21-24, reaching $4.2bn, primarily driven by a combination of rate increases, customer growth, and robust revenues from its pipeline and storage segment. EBITDA rose at a CAGR of 13.9% reaching $2bn, with margins expanding from 40% to 40.4%. Net income increased with a CAGR of 16.2% to $1bn.
CFO rose significantly over FY 21-24, climbing from minus $1.1bn to $1.7bn. The company’s liquidity position experienced robust growth, with cash and cash equivalent advancing from $117m to $307m. In addition, total debt-to-equity improved from 95.7% to 66.9%.
In comparison, National Fuel Gas Company, a local peer, reported a lower revenue CAGR of 3.7% to $1.9bn in FY 24. EBITDA rose at a CAGR of 7.1% to $1.2bn. However, net income decreased at a CAGR of minus 40.3% to $77.5m in FY 24.
Looking ahead, analysts anticipate revenue CAGR of 12.6% over FY 24-27, reaching $5.9bn in FY 27. In addition, analysts expect EBITDA CAGR of 12.5% to $2.9bn, with a margin of 48.5%. Net income is estimated to increase at a CAGR of 13.6% to $1.5bn. In comparison, analysts estimate an EBITDA CAGR of 12.7% for National Fuel Gas Company.
Promising stock performance
Over the past year, the company's stock delivered robust returns of approximately 23.1%. In comparison, National Fuel Gas Company’s stock delivered higher returns of about 52.4% over the same period. In addition, the company paid an annual dividend of $3.2 in FY 24, resulting in a dividend yield of 2.3%.
Atmos Energy is currently trading at a P/E of 23.2x, based on the FY 25 estimated EPS of $7.4, which is higher than its 3-year historical average of 18.6x and National Fuel Gas Company‘s P/E of 16.5x. The stock is currently trading at an EV/EBITDA multiple of 15.9x, based on the FY 25 estimated EBITDA of $2.3bn, which is lower than its 3-year historical average of 14.4x and that of National Fuel Gas Company (7.9x).
Atmos Energy is tracked by 12 analysts, with four having ‘Buy’ ratings and eight having “Hold” ratings, with an average target price of $164.2. However, as the stock has already reached its target price, only a near-term correction in the stock price could create a buy opportunity for investors.
Overall, Atmos Energy has demonstrated strong financial growth and promising stock performance, driven by its strategic investments in infrastructure and customer service. The company's robust earnings and positive outlook, coupled with its commitment to safety and sustainability, make it a compelling choice for investors. While the stock has reached its target price, any near-term corrections could present valuable investment opportunities. Overall, Atmos Energy's solid fundamentals and growth prospects position it well for continued success in the natural gas industry.
However, the company faces key risks typical of regulated natural gas utilities, including regulatory risks affecting revenues and returns, operational risks from pipeline replacement programs, and market risks like natural gas price fluctuations. In addition, financial risks such as liquidity, debt management, and access to capital markets are crucial for infrastructure investments and dividend payments.
