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Southwest Gas Holdings (SWX) Sustainability Report Keeps Undervalued Narrative In Focus

Simply Wall St · 2d ago

Southwest Gas Holdings (SWX) has released its 2025 Sustainability Report, ahead of its West Coast NDR presentation on September 9, 2026, giving investors fresh detail on operational and customer focused progress.

Against that operational backdrop, Southwest Gas Holdings’ share price has eased over the past week and month. However, the year to date share price return of 9.62% and a 1 year total shareholder return of 14.83% point to momentum that has been building rather than fading, supported by longer term total shareholder returns of 54.07% over three years and 51.19% over five years.

Spot similar momentum and operational progress in other utilities by scanning our hand picked 10 resilient stocks with low risk scores focused on resilient businesses with lower risk profiles.

The recent pullback in Southwest Gas Holdings after strong multi year gains raises a simple question. Are investors reassessing the business, or just cooling on the story for now as the valuation resets?

Most Popular Narrative: 14.2% Undervalued

At a last close of $87.86 versus a narrative fair value of $102.43, Southwest Gas Holdings is framed as undervalued, with that gap hinging on specific growth, profitability, and discount rate assumptions embedded in the most followed storyline around the stock.

Robust customer growth facilitated by ongoing population and economic expansion in the Southwest, with 40,000 new meter connections in the last 12 months, suggests extended demand for natural gas in core service territories, directly underpinning long term revenue and earnings growth.

Read the complete narrative. Read the complete narrative.

Want to see what turns those new connections into a higher profit base for Southwest Gas Holdings over time? The narrative leans on a specific blend of projected revenue expansion, wider margins, and a discount rate that together support that fair value gap. The key is how those moving parts link to the analyst earnings path and the multiple they apply to it.

Result: Fair Value of $102.43 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

Still, the narrative around Southwest Gas Holdings could be knocked off course if decarbonization policies curb long term gas demand or if major projects like Great Basin run into costly delays.

Find out about the key risks to this Southwest Gas Holdings narrative.

Another View on Southwest Gas Holdings’ Valuation

The story looks different when you swap the narrative fair value for simple earnings multiples. Southwest Gas Holdings trades on a P/E of 22.4x, compared with a fair ratio of 21.4x, a US Gas Utilities peer average of 17.2x and a global sector average of 13.8x. That richer pricing can indicate that investors are paying a premium for the current growth profile, or it can simply mean there is less room for error if expectations are not met. Which side of that line do you think the stock sits on today?

See what the numbers say about this price in our valuation breakdown.See what the numbers say about this price — find out in our valuation breakdown.

NYSE:SWX P/E Ratio as at Sep 2026
NYSE:SWX P/E Ratio as at Sep 2026

Next Steps

Sentiment on Southwest Gas Holdings is mixed, with clear positives and some issues that still bother investors. It may be useful to move quickly and inspect the underlying data for yourself before views harden around a single story. To see both sides in one place, review the 2 key rewards and 2 important warning signs.

Looking for more investment ideas beyond Southwest Gas Holdings?

If you only stop at Southwest Gas Holdings, you risk missing other opportunities that fit your style, your risk comfort, and your income goals.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.