Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Atmos Energy Corporation's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 13.8% to 9.1% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 32, DPO 51, DIO 43). At a 5.9% WACC with mid-year discounting, the terminal value (91% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 13.1x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $435.17 per share, suggesting ATO is undervalued by 138.4% at the current price of $182.57.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 2,246 | 2,433 | 2,531 | 2,820 | 3,077 | 3,154 |
| (−) Net Interest | 175 | 189 | 197 | 220 | 239 | 245 |
| (+) D&A | 2,744 | 3,051 | 3,322 | 3,552 | 3,845 | 3,942 |
| EBITDA | 5,164 | 5,673 | 6,050 | 6,592 | 7,161 | 7,341 |
| (−) Tax | 331 | 359 | 373 | 416 | 454 | — |
| (−) CapEx | 3,508 | 3,799 | 3,953 | 4,405 | 4,805 | — |
| (−) ΔWC | 215 | 34 | 18 | 53 | 47 | — |
| Free Cash Flow (FCF) | 1,110 | 1,481 | 1,706 | 1,718 | 1,855 | — |
| Peers' EBITDA Multiple | 13.1x | |||||
| Terminal Value | 96,308 | |||||
| WACC / Discount Rate | 5.92% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,078 | 1,358 | 1,477 | 1,404 | 1,432 | 72,238 |
| Enterprise Value | 78,989 | |||||
| Projection Period | 6,751 | 8.5% | ||||
| Terminal Value | 72,238 | 91.5% | ||||
| (−) Current Net Debt | 9,100 | |||||
| Equity Value | 69,890 | |||||
| (÷) Outstanding Shares | 161M | |||||
| Fair Price | $435 | +138.4% | ||||
| WACC \ EV/EBITDA Exit Multiple | 9.1x | 11.1x | 13.1x | 15.1x | 17.1x |
|---|---|---|---|---|---|
| 3.9% | $331 | $407 | $482 | $558 | $633 |
| 4.9% | $314 | $386 | $458 | $530 | $602 |
| 5.9% | $298 | $367 | $435 | $504 | $572 |
| 6.9% | $283 | $348 | $414 | $479 | $544 |
| 7.9% | $268 | $331 | $393 | $455 | $518 |
Current price: $182.57. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.