Value
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.2 |
| P/S | 6.2 |
| EV/EBITDA | 2.9 |
| Fwd P/E | 7.0 |
| PEG | 4.4 |
| Analyst target | 4.0 |
- ▸Forward P/E: 18.0x
- ▸PEG: 2.08
ATO · Why this verdict
Why Atmos Energy (ATO) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictHOLD
Overall score5.6/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Atmos Energy is a high-margin regulated gas utility with a steady earnings record and positive momentum, but price already sits 7.9% above the analyst target, earnings are 3 days away and 75% Texas concentration adds regional risk.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Profitability is strong, with margins of 28% and a Piotroski F-Score of 8 out of 9, backed by best-in-class margins and conservative debt versus peers. Quality breakdown | Margins stay above 25% and the F-Score stays at 7 or higher. | →Stable |
| CounterFree cash flow is -158% of net income, a flagged earnings-quality weakness that reflects heavy capital spending funded externally. | ||
Price of $172.41 is 7.9% above the $158.74 analyst target, so upside is negative with no remaining reward-to-risk. Upside pct | Analyst targets are revised above the current price or the stock pulls back toward the $169.42 entry level. | →Stable |
| CounterUtility analyst targets lag in rising markets, and positive sentiment (news score +0.70) could justify upward revisions. | ||
The company has beaten EPS in 3 of the last 4 quarters with no misses and an average surprise of 3.6%. Earnings track record | EPS meets or beats estimates at the 2026-11-04 report. | ↑Improving |
| CounterSurprises are small (0.07% to 6.85%) and earnings land in 3 days, so a binary event risk exists at an elevated price. | ||
Geographic concentration is high: Texas accounts for 75.0% of the business. Bear case | Texas regulatory outcomes remain constructive and concentration stays near 75%. | ↓Deteriorating |
| CounterAn adverse Texas rate decision or severe weather event would hit most of the earnings base at once. | ||
Momentum is positive at 7.1 with rising on-balance volume, but RSI of 70 flags an overbought rally and price is slightly below the 200-day average. Momentum breakdown | Price reclaims the 200-day average without RSI staying above 70. | ↑Improving |
| CounterA death cross is recovering but not resolved, and an overbought bear rally often fades. | ||
Profitability is strong, with margins of 28% and a Piotroski F-Score of 8 out of 9, backed by best-in-class margins and conservative debt versus peers.
→StableQuality breakdown
- Expectation
- Margins stay above 25% and the F-Score stays at 7 or higher.
CounterFree cash flow is -158% of net income, a flagged earnings-quality weakness that reflects heavy capital spending funded externally.
Price of $172.41 is 7.9% above the $158.74 analyst target, so upside is negative with no remaining reward-to-risk.
→StableUpside pct
- Expectation
- Analyst targets are revised above the current price or the stock pulls back toward the $169.42 entry level.
CounterUtility analyst targets lag in rising markets, and positive sentiment (news score +0.70) could justify upward revisions.
The company has beaten EPS in 3 of the last 4 quarters with no misses and an average surprise of 3.6%.
↑ImprovingEarnings track record
- Expectation
- EPS meets or beats estimates at the 2026-11-04 report.
CounterSurprises are small (0.07% to 6.85%) and earnings land in 3 days, so a binary event risk exists at an elevated price.
Geographic concentration is high: Texas accounts for 75.0% of the business.
↓DeterioratingBear case
- Expectation
- Texas regulatory outcomes remain constructive and concentration stays near 75%.
CounterAn adverse Texas rate decision or severe weather event would hit most of the earnings base at once.
Momentum is positive at 7.1 with rising on-balance volume, but RSI of 70 flags an overbought rally and price is slightly below the 200-day average.
↑ImprovingMomentum breakdown
- Expectation
- Price reclaims the 200-day average without RSI staying above 70.
CounterA death cross is recovering but not resolved, and an overbought bear rally often fades.
Per-dimension breakdown
Quality
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.3 |
| ROA | 2.6 |
| Gross margin | 8.4 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 3.3 |
| FCF quality | 0.0 |
| Moat | 6.0 |
| Piotroski F | 8.9 |
- ▸Strong margins: 28%
- ▸Earnings quality RED FLAG: -158% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
5.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.7 |
| EPS growth | 6.7 |
Momentum
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 1.2 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.1 |
| Analyst rating | 5.0 |
| Price target | 5.6 |
Insider
4.1/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 4.2 |
| notable moves | 3.0 |
- ▸Negligible insider buying — $50,278 (0.000% of mkt cap)
Peer rank
6.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.7 |
| quality rank | 7.5 |
| growth rank | 5.0 |
- ▸Best-in-class margins
- ▸Conservative debt levels
Technical
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.9 |
| support resistance | 3.0 |
| 52w position | 8.4 |
| gap | 5.0 |
Risk (lower is worse)
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.5 |
| days to cover | 6.7 |
| volatility | 7.7 |
| put call | 7.4 |
| implied vol | 6.7 |
| max pain risk | 3.0 |
| beta | 9.7 |
| debt equity | 6.9 |
| news risk | 4.0 |
- ▸Above max pain $110
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| surprise avg | 3.8 |
| dividend safety | 3.7 |
| news activity | 8.0 |
- ▸Strong earnings: 3B/0M
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (6)
- MOMENTUM:7.0>=5.5
- INSIDER:OK
- 8K:CLEAN
- EARNINGS_PROXIMITY:NO_DATE
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.1=NEGATIVE
Warning (0)
none
Reward-to-Risk
-1.08
Upside
-9.3%
Downside
8.6%
Sizing output
AVOID
SetupMomentum Cont — Trend continuation, RSI 64, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:7.0>=5.5. Top dim: Momentum at 7.0; weakest: Insider at 4.1. No conviction either direction.
The strongest dimensions are Momentum at 7.0, Risk (lower is worse) at 6.7, and Peer rank at 6.1; the weakest are Insider at 4.1, Technical at 4.6, and Value at 5.1. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -1.08 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Regulated Utility Margins
Trip ifOperating margin falls below 20% from the current 28%.
- P2Price Above Analyst Target
Trip ifPrice exceeds the analyst target by more than 15% from the current 7.9%.
- P3Steady Earnings Record
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P4Texas Geographic Concentration
Trip ifTexas share of business exceeds 80% from the current 75.0%.
- P5Recovering Momentum Overbought
Trip ifPrice drops below the $163.44 stop level from the current $172.41.