Is ONE Gas, Inc. overvalued or undervalued?

As of 8 September 2025, the valuation grade for ONE Gas, Inc. has moved from fair to expensive, indicating that the stock is overvalued. The company exhibits a P/E ratio of 18, which is notably higher than the attractive peer New Jersey Resources Corp. at 11.53, and a PEG ratio of 18.12, suggesting limited growth potential relative to its price. Additionally, the EV to EBITDA ratio stands at 10.31, which is comparable to peers like Spire Inc. at 11.13, but still reflects a premium valuation for ONE Gas.
In terms of performance, ONE Gas has underperformed relative to the S&P 500 across multiple time frames, with a 1-year return of 3.04% compared to the S&P 500's 17.14%, and a 3-year return of -4.91% against the S&P 500's impressive 70.41%. This underperformance reinforces the notion that the stock may be overvalued in the current market context.