Atmos Energy Corporation Fundamental Analysis (NYSE: ATO)
Atmos Energy Corporation (NYSE: ATO) shows moderate financial fundamentals with a PE ratio of 19.96, profit margin of 28.50%, and ROE of 9.67%. The company generates $4.9B in annual revenue with strong year-over-year growth of 12.91%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 36.9/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze ATO's fundamental strength across five key dimensions:
Efficiency Score
WeakATO struggles to generate sufficient returns from assets.
Valuation Score
ExcellentATO trades at attractive valuation levels.
Growth Score
ExcellentATO delivers strong and consistent growth momentum.
Financial Health Score
ModerateATO shows balanced financial health with some risks.
Profitability Score
WeakATO struggles to sustain strong margins.
Key Financial Metrics
Is ATO Expensive or Cheap?
P/E Ratio
ATO trades at 19.96 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, ATO's PEG of 1.29 indicates fair valuation.
Price to Book
The market values Atmos Energy Corporation at 1.87 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 6.96 times EBITDA. This is generally considered low.
How Well Does ATO Make Money?
Net Profit Margin
For every $100 in sales, Atmos Energy Corporation keeps $28.50 as profit after all expenses.
Operating Margin
Core operations generate 36.97 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $9.67 in profit for every $100 of shareholder equity.
ROA
Atmos Energy Corporation generates $4.44 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Atmos Energy Corporation generates strong operating cash flow of $2.00B, reflecting robust business health.
Free Cash Flow
Atmos Energy Corporation generates weak or negative free cash flow of $-2.00B, restricting financial flexibility.
FCF Per Share
Each share generates $-12.00 in free cash annually.
FCF Yield
ATO converts -7.15% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
19.96
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
1.29
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.87
vs 25 benchmark
P/S Ratio
Price to sales ratio
5.75
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.67
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.81
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.10
vs 25 benchmark
ROA
Return on assets percentage
0.04
vs 25 benchmark
ROCE
Return on capital employed
0.06
vs 25 benchmark
How ATO Stacks Against Its Sector Peers
| Metric | ATO Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 19.96 | 20.26 | Neutral |
| ROE | 9.67% | 1019.00% | Weak |
| Net Margin | 28.50% | -658.00% (disorted) | Strong |
| Debt/Equity | 0.67 | 1.64 | Strong (Low Leverage) |
| Current Ratio | 0.81 | 1.70 | Weak Liquidity |
| ROA | 4.44% | 4578088.00% | Weak |
ATO outperforms its industry in 2 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Atmos Energy Corporation's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
28.78%
Industry Style: Defensive, Dividend, Income
High GrowthEPS CAGR
53.97%
Industry Style: Defensive, Dividend, Income
High GrowthFCF CAGR
52.53%
Industry Style: Defensive, Dividend, Income
High Growth