Atmos Energy (ATO) opened fiscal Q1 2026 with revenue of US$1.3b and EPS of US$2.48, alongside trailing twelve month revenue of US$4.9b and EPS of US$7.78 that frame the latest print within a steadily building earnings profile. Over recent quarters, revenue has moved from US$1.2b in Q1 2025 to US$1.3b in Q1 2026, while quarterly EPS has shifted from US$2.25 to US$2.48, supported by trailing twelve month net income of about US$1.2b. This keeps the focus firmly on how durable current margin levels really are.

See our full analysis for Atmos Energy.

With the headline numbers on the table, the next step is to see how this earnings run rate lines up with the most common narratives around Atmos Energy, highlighting where the data supports the story and where it starts to push back.

TTM net margin holds at 25.7%

• On a trailing twelve month basis, Atmos Energy converted US$4.9b of revenue into US$1.2b of net income, which works out to a 25.7% net margin compared with 25.9% a year earlier.
• Supporters of the bullish view often point to earnings quality, and the numbers give them some backing, but not without a small wrinkle:
  • Net income over the last twelve months reached US$1.2b on US$4.9b of revenue, which heavily supports the bullish case that this is a high margin, steady utility business.
  • At the same time, the slip from a 25.9% margin to 25.7% shows that even in a solid year, profitability is not completely flat, which cautious investors may keep an eye on.

To see how this margin profile fits into the longer term growth story and risk trade offs, have a look at how other investors frame Atmos Energy in their narratives. 📊 Read the full Atmos Energy Consensus Narrative.

TTM EPS of US$7.78 and mid teens growth

• Trailing twelve month basic EPS sits at US$7.78, alongside commentary that earnings have grown about 13.8% per year over the past five years and are forecast at roughly 11.2% per year.
• What stands out for bullish investors is how current EPS lines up with that growth track, but there are a few pressure points to balance:
  • The move from US$6.83 to US$7.78 in trailing EPS over roughly a year lines up with the mid teens earnings growth figures that bulls highlight as support for an earnings focused story.
  • However, earnings growth running ahead of expected revenue growth of about 8.9% per year means part of the bullish case depends on margins or efficiency staying close to current levels, which ties back to the small margin compression we just saw.

Premium valuation with 22.8x P/E and US$121.85 DCF fair value

• The stock trades on a P/E of 22.8x versus a 17.1x peer average and 14.5x for the Global Gas Utilities group, while the DCF fair value of US$121.85 sits below the current share price of US$171.83.
• Critics who take a more bearish stance focus on how this premium ties back to the balance sheet and cash flows:
  • The gap between the current price of US$171.83 and the DCF fair value of US$121.85, along with a 22.8x P/E, supports the bearish view that the market is already paying up relative to both intrinsic value estimates and sector averages.
  • Layer on a 2.33% dividend that is not strongly covered by free cash flow and a high level of debt, and you can see why more cautious holders question how much room is left if earnings growth or margins come in below the recent trend.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Atmos Energy's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

See What Else Is Out There

Atmos Energy’s premium 22.8x P/E against peers, a DCF value below the current share price, and dividend coverage questions all point to valuation and cash flow pressure.

If paying up for those trade offs feels uncomfortable, use our these 867 undervalued stocks based on cash flows to quickly focus on stocks where pricing and cash generation look more aligned right now.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.