Is Atmos Energy Stock Underperforming the Nasdaq?

Dallas, Texas-based Atmos Energy Corporation (ATO) distributes natural gas. With a market cap of $28.3 billion,  the company provides natural gas marketing and procurement services to large customers, as well as manages storage and pipeline assets.

Companies worth $10 billion or more are generally described as “large-cap stocks,” and ATO perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the regulated gas utilities industry. ATO’s financial strength stems from operational efficiency, strategic rate management, and infrastructure investments, positioning it for continued financial success and customer service excellence.

Despite its notable strength, ATO shares have slipped 11.9% from their 52-week high of $192.51, achieved on Apr. 9. Over the past three months, ATO stock has declined 9.7%, underperforming the Nasdaq Composite’s ($NASX) 17.3% gains during the same time frame.

Shares of ATO rose 1.2% on a YTD basis and climbed 11.6% over the past 52 weeks, underperforming NASX’s YTD gains of 13.5% and 35.1% returns over the last year.

To confirm the bearish trend, ATO is trading below its 50-day moving average since early May. The stock has been trading below its 200-day moving average since late May. 

On May 6, ATO shares closed down by 1.3% after reporting its Q2 results. Its EPS of $3.47 exceeded Wall Street expectations of $3.37. The company’s revenue was $2 billion, falling short of Wall Street forecasts of $2.2 billion. ATO expects full-year EPS to be $8.40 to $8.50.

ATO’s rival, Southwest Gas Holdings, Inc. (SWX) shares have taken the lead over the stock, with a 10.1% uptick on a YTD basis and 21.8% gains over the past 52 weeks.

Wall Street analysts are cautious on ATO’s prospects. The stock has a consensus “Hold” rating from the 15 analysts covering it, and the mean price target of $185.92 suggests a potential upside of 9.6% from current price levels.