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Comstock Resources (CRK)
NYSE:CRK
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Comstock Resources
(NYSE:CRK)
49Neutral
Positive Factors
Cost Efficiency
The company has successfully reduced drilling costs by $699 per lateral foot and completion costs by $516 per lateral foot.
Financial Stability
Comstock is generating sufficient cash flow to cover its capital expenditures, indicating a focus on deleveraging and financial stability.
Negative Factors
Production Guidance
CRK's production and capital expenditure guidance for the first quarter of 2025 and the entire year 2025 were slightly worse than expected.
Valuation Concerns
Analyst maintains a Sell rating on valuation, believing it has significantly outstripped fundamentals at current natural gas prices.
Comstock Resources (CRK) vs. S&P 500 (SPY)
Market Cap
$5.38B
Dividend Yield0.66%
Average Volume (3M)2.37M
Price to Earnings (P/E)―
Beta (1Y)1.71
Revenue Growth-22.76%
EPS Growth-199.21%
CountryUS
Employees256
SectorEnergy
Sector Strength72
IndustryFossil Fuels
Share Statistics
EPS (TTM)-0.76
Shares Outstanding292,919,000
10 Day Avg. Volume2,529,070
30 Day Avg. Volume2,366,420
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)4.29
Price to Cash Flow (P/CF)5.00
P/FCF Ratio5.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$17.00Price Target Upside-6.28% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering10
Comstock Resources Business Overview & Revenue Model
Company DescriptionComstock Resources, Inc. engages in the acquisition, development, and exploration of oil and natural gas. It focuses primarily on properties located in Texas and Louisiana. The company was founded in 1919 and is headquartered in Frisco, TX.
How the Company Makes MoneyComstock Resources generates revenue primarily through the production and sale of natural gas. The company's revenue model revolves around extracting natural gas from its extensive assets in the Haynesville shale and selling it to various markets. Key revenue streams include the direct sale of natural gas to industrial, commercial, and residential consumers, as well as entering into long-term contracts with utility companies and other energy providers. Comstock's earnings are significantly influenced by natural gas prices, production volume, and its ability to manage operational costs effectively. Additionally, strategic partnerships and joint ventures with other energy companies can enhance its production capabilities and market reach, contributing further to its revenue.
Comstock Resources Financial Statement Overview
Summary
Comstock Resources is facing financial headwinds with declining revenues, negative profitability, and increasing leverage. While the company maintains a stable equity base, the high debt levels and negative cash flows pose significant financial risks. Strategic adjustments are necessary to improve profitability and cash generation in the coming periods.Income Statement
The income statement for Comstock Resources shows significant challenges. The TTM (Trailing-Twelve-Months) data reflects a negative net income and EBIT, leading to a negative net profit margin. The revenue has decreased substantially from the prior year. Although EBITDA margin remains positive, the overall profitability has declined due to increased expenses and lower revenues.45
Neutral
Balance Sheet
The balance sheet indicates moderate financial stability. The debt-to-equity ratio is relatively high, reflecting significant leverage, which could pose risks in economic downturns. However, the equity ratio remains fairly stable, indicating a balanced asset structure. Return on equity has turned negative in the TTM due to net losses, impacting overall financial health.50
Neutral
Cash Flow
Cash flow analysis reveals concerns, particularly with a negative free cash flow in the TTM period, indicating the company is spending more on capital expenditures than it is generating from operations. The operating cash flow to net income ratio indicates cash flow remains stronger relative to reported earnings, but the negative free cash flow growth is troubling.40
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.25B | 1.57B | 3.63B | 1.85B | 858.20M | Gross Profit |
| 1.07B | 266.24M | 2.33B | 1.10B | 195.08M | EBIT |
| -168.62M | 226.47M | 2.28B | 900.77M | 163.03M | EBITDA |
| 638.19M | 1.02B | 2.06B | 457.55M | 590.31M | Net Income Common Stockholders |
| -218.75M | 211.57M | 1.14B | -241.72M | -52.42M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 6.80M | 16.67M | 54.65M | 30.66M | 30.27M | Total Assets |
| 6.38B | 6.25B | 5.69B | 4.67B | 4.62B | Total Debt |
| 3.03B | 2.71B | 2.24B | 2.62B | 2.52B | Net Debt |
| 3.02B | 2.70B | 2.19B | 2.59B | 2.49B | Total Liabilities |
| 4.05B | 3.87B | 3.42B | 3.48B | 3.18B | Stockholders Equity |
| 2.24B | 2.36B | 2.28B | 1.19B | 1.44B |
| Cash Flow | Free Cash Flow | |||
| -477.14M | -408.24M | 630.59M | 169.79M | 66.01M | Operating Cash Flow |
| 620.34M | 1.02B | 1.70B | 859.00M | 575.70M | Investing Cash Flow |
| -1.08B | -1.42B | -1.10B | -550.82M | -511.20M | Financing Cash Flow |
| 454.07M | 362.97M | -576.72M | -307.80M | -52.76M |
Comstock Resources Technical Analysis
Positive
18.14
Price Trends
18.98
Negative
16.52
Positive
13.60
Positive
Market Momentum
-0.20
Positive
48.15
Neutral
48.88
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CRK, the sentiment is Positive. The current price of 18.14 is below the 20-day moving average (MA) of 18.54, below the 50-day MA of 18.98, and above the 200-day MA of 13.60, indicating a neutral trend. The MACD of -0.20 indicates Positive momentum. The RSI at 48.15 is Neutral, neither overbought nor oversold. The STOCH value of 48.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CRK.
Comstock Resources Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $29.34B | 109.57 | 1.30% | 1.28% | 3.00% | -90.88% | |
77 Outperform | $22.33B | 7.50 | 21.77% | 4.21% | 3.00% | -21.63% | |
73 Outperform | $11.16B | 199.50 | 0.82% | ― | -4.22% | -77.20% | |
57 Neutral | $8.36B | 5.47 | -5.51% | 7.41% | 0.15% | -68.69% | |
56 Neutral | $9.04B | 33.39 | 6.88% | 0.85% | -7.57% | -69.25% | |
49 Neutral | $5.38B | ― | -9.51% | 0.66% | -22.76% | -199.21% |
* Energy Sector Average
Performance Comparison
CRK
Comstock Resources
18.14
9.94
121.22%
DVN
Devon Energy
34.75
-11.92
-25.54%
EQT
EQT
48.86
15.62
46.99%
RRC
Range Resources
37.60
5.68
17.79%
AR
Antero Resources
36.01
9.83
37.55%
Comstock Resources Earnings Call Summary
Earnings Call Date: Feb 18, 2025 | % Change Since: -4.22% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Neutral
Comstock Resources reported significant acreage expansion and operational improvements in the Western Haynesville. However, the company faced challenges due to low natural gas prices and a decline in production. Despite these challenges, Comstock improved its financial position and reserve growth, indicating a strong foundation for future growth.Highlights
Expansion in Western Haynesville
Comstock Resources has expanded its footprint to 518,000 net acres in the Western Haynesville with 80% of the acreage HBP'ed, allowing for significant future drilling potential.
Operational Efficiency Improvements
Drilling and completion costs in the Western Haynesville have been significantly reduced, with drilling costs down 33% and completion costs down 28% compared to previous levels.
Strong Reserve Growth
Despite low gas prices, Comstock achieved a 6% reserve growth and replaced 107% of its 2024 production with 899 Bcf of drilling-related reserve additions.
Partnership with Quantum Capital Solutions
Quantum Capital Solutions committed up to $300 million for the build-out of gathering and treating systems, enhancing infrastructure for the Western Haynesville play.
Improved Financial Position
Comstock Resources improved its financial position by increasing its hedging program, enhancing liquidity with a $400 million senior notes offering, and securing a $100.5 million equity private placement.
Lowlights
Low Natural Gas Prices
The realized gas price before hedging was $1.98 per Mcf in 2024, representing a 30-year low, excluding the 2020 COVID year.
Production Decline
Production in the fourth quarter averaged 1.35 Bcfe per day, which is 12% lower than the fourth quarter of 2023.
Net Income Loss
Comstock reported a net loss of $0.24 per share for 2024 compared to a net income of $133 million in 2023, primarily due to weaker natural gas prices and higher amortization expenses.
Company Guidance
During the Comstock Resources fourth quarter 2024 earnings conference call, CEO Jay Allison highlighted significant progress in the Western Haynesville play, where the company has amassed 518,000 net acres and increased production with 18 wells now operational. The company reported a 30-year low in realized gas prices, excluding the COVID year, at $1.98 per Mcf, but offset this by enhancing its hedging program and securing $300 million in funding for midstream developments. Comstock plans to drill 70 more wells over the next five years to maintain its acreage. The company is focusing on reducing drilling and completion costs, with drilling costs per lateral foot down 33% and completion costs down 28% from 2022 levels. Looking forward, Comstock aims to maintain financial discipline, with a focus on cash flow generation and debt reduction, while leveraging its strategic location near Gulf Coast LNG facilities.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.