Is ONE Gas, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for ONE Gas, Inc. has moved from fair to expensive, indicating a shift towards overvaluation. The company is currently considered overvalued based on its P/E ratio of 18, which is higher than the attractive peer New Jersey Resources Corp. at 11.53, and its EV to EBITDA ratio of 10.31, which is also above the fair peer Spire Inc. at 11.13. Additionally, the PEG ratio stands at 18.12, suggesting that the stock is priced high relative to its growth prospects.
In comparison to its peers, ONE Gas, Inc. shows a higher valuation than Southwest Gas Holdings, Inc., which is categorized as very expensive with a P/E of 28.47, but still maintains a more favorable EV to EBITDA ratio than this peer. While the company has performed well in the short term, with a year-to-date return of 18.53% compared to the S&P 500's 13.30%, its long-term performance over three and five years has lagged significantly behind the index, with returns of 13.40% and 12.27%, respectively, compared to 81.19% and 91.29% for the S&P 500. This suggests that despite recent gains, the stock may not be a sustainable investment at its current valuation.