DCF Studio

    ATO · NYQ · Utilities

    Atmos Energy Corporation

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 32.19

    Market price

    USD 174.65

    Implied upside

    -81.6%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-09-30

    AdjustedFree cashflow is negative in at least one forecast year, so terminal value carries most of the valuation.
    AdjustedCapital expenditure runs at 67.5% of revenue against depreciation of 14.6%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD 32.19-81.6%
    Exit multiple
    USD 147.09-15.8%
    Market price
    USD 174.65

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    -1bn0bn2bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 5.1bnUSD 5.8bnUSD 6.4bnUSD 7.0bnUSD 7.6bnUSD 8.1bnUSD 8.6bnUSD 9.1bnUSD 9.4bnUSD 9.6bn+7.2%
    EBITUSD 1.4bnUSD 1.6bnUSD 1.8bnUSD 2.0bnUSD 2.1bnUSD 2.3bnUSD 2.4bnUSD 2.5bnUSD 2.6bnUSD 2.7bn+7.2%
    NOPATUSD 1.3bnUSD 1.4bnUSD 1.6bnUSD 1.7bnUSD 1.8bnUSD 2.0bnUSD 2.1bnUSD 2.2bnUSD 2.3bnUSD 2.3bn+7.2%
    Add depreciation & amortisationUSD 752.0mUSD 842.6mUSD 934.1mUSD 1.0bnUSD 1.1bnUSD 1.2bnUSD 1.3bnUSD 1.3bnUSD 1.4bnUSD 1.4bn+7.2%
    Less capital expenditureUSD -3.5bnUSD -3.6bnUSD -3.7bnUSD -3.7bnUSD -3.6bnUSD -3.5bnUSD -3.3bnUSD -3.0bnUSD -2.6bnUSD -2.2bn-4.7%
    Capex, % of revenue67.5%62.6%57.7%52.8%47.9%42.9%38.0%33.1%28.2%23.3%-
    Less increase in working capitalUSD -16.5mUSD -23.7mUSD -23.9mUSD -23.6mUSD -22.7mUSD -21.2mUSD -19.0mUSD -16.2mUSD -12.8mUSD -9.0m-6.5%
    Free cashflow to firmUSD -1.5bnUSD -1.4bnUSD -1.2bnUSD -986.4mUSD -694.2mUSD -341.5mUSD 65.4mUSD 517.3mUSD 1.0bnUSD 1.5bn-
    Discount factor0.96650.90270.84320.78760.73570.68720.64190.59960.56000.5231-
    Present valueUSD -1.4bnUSD -1.2bnUSD -1.0bnUSD -776.9mUSD -510.7mUSD -234.7mUSD 42.0mUSD 310.2mUSD 561.1mUSD 786.7m-
    Present Value Of The ForecastUSD -3.5bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.696Reported 0.547, pulled toward 1.0 (Blume)
    Cost of equity7.84%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 9.1x interest cover. Book interest / average debt was lower, at 2.0%.
    Market capitalisationUSD 29.5bn76.0% of capital
    Total debtUSD 9.3bn24.0% of capital, book value as a proxy
    Tax rate13.5%Effective, capped at statutory
    WACC7.06%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 32.19

    125% of EV

    Forecast FCFF, final year
    USD 1.5bn
    Capex at depreciation, working capital in reinvestment
    USD 2.3bn
    Less reinvestment at g/ROIC (35.4% of NOPAT)
    USD -829.7m
    Capitalised
    USD 1.5bn
    ROIC (WACC floor)
    7.1%
    Terminal value, undiscounted
    USD 34.0bn
    Terminal value, discounted
    USD 17.8bn
    Enterprise value
    USD 14.3bn
    Less net debt
    USD 9.1bn
    Equity value
    USD 5.2bn

    Exit at 16.8x EBITDA

    Value per shareUSD 147.09

    111% of EV

    Terminal value, undiscounted
    USD 69.3bn
    Terminal value, discounted
    USD 36.2bn
    Enterprise value
    USD 32.7bn
    Less net debt
    USD 9.1bn
    Equity value
    USD 23.6bn

    Spread between methods: 128%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.06%115.40115.76117.58121.92131.18
    6.06%65.9963.1060.2157.3354.44
    7.06%36.8734.5332.1929.8527.51
    8.06%15.6113.6811.749.807.87
    9.06%-0.43-2.06-3.69-5.32-6.95

    Outlined: this model. Green text: above today's price of 174.65. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year3.8%7.4%16.8%
    EBIT margin33.2%28.1%50.7%
    Discount rate-7.1%4.6%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.