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Comstock Resources (CRK)
NYSE:CRK

Comstock Resources (CRK) AI Stock Analysis

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Comstock Resources

(NYSE:CRK)

Rating:52Neutral
Price Target:
$24.00
▲(1.05%Upside)
Comstock Resources' score is primarily influenced by financial challenges and an unfavorable valuation. Despite strategic successes and positive technical indicators, the negative P/E ratio and leverage risks weigh heavily on the overall assessment.
Positive Factors
Cost Efficiency
The company has successfully reduced drilling costs by $699 per lateral foot and completion costs by $516 per lateral foot.
Emerging Resource Potential
CRK is a pure-play natural gas company with an emerging resource in the Western Haynesville, reflecting the improving long-term demand outlook and growing resource potential.
Exploration Success
Successful early results on the Olajuwon Pickens #1 well should improve investors' confidence across a larger area of its Western Haynesville position.
Negative Factors
Cash Flow Challenges
Comstock is experiencing a cash burn, anticipated to reverse by the fourth quarter, but current quarters show negative free cash flow.
Leverage Concerns
CRK's leverage is more than double peer levels, making meaningful shareholder returns unlikely until 2027.
Production and Capex Guidance
2Q25 guidance was disappointing with higher capex and lower production relative to expectations.

Comstock Resources (CRK) vs. SPDR S&P 500 ETF (SPY)

Comstock Resources Business Overview & Revenue Model

Company DescriptionComstock Resources, Inc. is an independent energy company focused primarily on the acquisition, exploration, and development of oil and natural gas properties. Headquartered in Frisco, Texas, Comstock's operations are mainly concentrated in the prolific Haynesville shale in North Louisiana and East Texas. The company is committed to providing efficient and sustainable energy solutions, leveraging advanced technology to maximize resource recovery and operational efficiency.
How the Company Makes MoneyComstock Resources generates revenue primarily through the exploration, development, and production of natural gas and oil. The company focuses on the Haynesville shale, which is one of the most productive natural gas fields in the United States. Revenue is mainly derived from the sale of natural gas, which constitutes the majority of its production portfolio. Comstock enters into contracts with various buyers, including utilities, industrial users, and marketers, to sell its natural gas production. Additionally, the company may engage in hedging activities to manage price risks associated with market fluctuations. Strategic partnerships and joint ventures can also play a role in expanding its resource base and enhancing production capabilities, contributing to its overall earnings.

Comstock Resources Earnings Call Summary

Earnings Call Date:Apr 30, 2025
(Q1-2025)
|
% Change Since: 29.99%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of positive developments and challenges. The successful Olajuwon well and improved financial performance highlight the company's strategic successes in the Western Haynesville. However, production decline, losses in gas marketing, and increased operating costs present significant challenges.
Q1-2025 Updates
Positive Updates
Successful Olajuwon Well
The Olajuwon well, located in Freestone County, was turned to sales with an initial production rate of 41 million cubic feet per day. This major step out is 24.4 miles away from the nearest producing well and confirms the geological success of the Western Haynesville play.
Improved Financial Performance
Natural gas and oil sales increased to $405 million, driven by higher natural gas prices. The company generated $239 million of operating cash flow and reported an adjusted net income of $53.8 million, compared to a loss in Q1 2024.
Drilling and Cost Efficiency
The drilling group has significantly reduced well costs and improved efficiencies, with the average lateral length for wells increasing and drilling costs per foot decreasing by 21% from the fourth quarter.
Strong Liquidity Position
Comstock ended the quarter with $510 million of borrowings, $3.1 billion in total debt, and $1 billion of liquidity. The borrowing base was reaffirmed at $2 billion.
Environmental Initiatives
The company reported a 28% improvement in greenhouse gas intensity and a 2.5% improvement in methane emission intensity from 2023. A partnership with BKV Corporation was announced to develop carbon capture projects.
Negative Updates
Production Decline
Production in Q1 2025 averaged 1.28 Bcfe per day, which is 17% lower than Q1 2024. This decline was due to the decision to drop two rigs and defer completion activity last year.
Loss in Gas Marketing
The company incurred a $16 billion loss on third-party gas marketing due to the high volatility in gas prices and obligations to fill transport.
Increased Operating Costs
Operating costs per Mcfe increased by $0.11 from the fourth quarter, with higher production and advertisement taxes, lifting costs, and gathering costs.
Company Guidance
During the Q1 2025 earnings call, Comstock Resources provided guidance highlighting several key metrics. The company reported natural gas and oil sales of $405 million, generating $239 million in operating cash flow or $0.81 per diluted share. Adjusted EBITDAX for the quarter was $293 million, with an adjusted net income of $53.8 million or $0.18 per diluted share. The company's production averaged 1.28 Bcfe per day, reflecting a 17% decrease from Q1 2024 due to strategic rig reductions and deferred completion activities. Comstock also emphasized their continued focus on the Western Haynesville play, with plans to drill 20 wells and turn 15 to sales in 2025, alongside a midstream investment of $130 to $150 million funded by partners, targeting the growing demand for natural gas driven by rising prices and expanding LNG requirements.

Comstock Resources Financial Statement Overview

Summary
Comstock Resources faces significant financial challenges, with declining revenues and profitability issues impacting its income statement. The balance sheet is heavily leveraged, increasing financial risk in a cyclic industry. While operating cash flow remains a relative strength, negative free cash flow highlights a dependency on external financing to sustain operations and investments. The company needs to address its financial structure and improve operational efficiencies to weather industry volatility.
Income Statement
35
Negative
Comstock Resources has struggled with profitability, as evidenced by negative net income in recent periods. The TTM (Trailing-Twelve-Months) shows a significant drop in total revenue compared to previous years, leading to negative EBIT and EBITDA margins. The revenue growth rate is negative, indicating a decline in sales performance. Margins have also contracted significantly, pointing to operational inefficiencies or market challenges.
Balance Sheet
45
Neutral
The balance sheet shows a high debt-to-equity ratio, reflecting significant leverage which could pose financial risks, especially in volatile markets. The equity ratio is stable, suggesting a balanced asset structure, but return on equity has been negative, indicating that equity is not generating adequate returns due to net losses.
Cash Flow
50
Neutral
Operating cash flow has been relatively stable, providing some financial cushion for operations. However, free cash flow has been negative, raising concerns about the company's ability to fund its capital expenditures without additional financing. The operating cash flow to net income ratio is favorable, but the free cash flow to net income ratio is concerning.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
1.43B1.25B1.57B3.63B1.85B858.20M
Gross Profit
340.30M-130.06M266.24M2.33B1.10B195.08M
EBIT
-29.60M-168.62M226.47M2.28B900.77M163.03M
EBITDA
275.09M638.19M1.02B2.06B457.55M590.31M
Net Income Common Stockholders
-323.71M-218.75M211.57M1.14B-241.72M-52.42M
Balance SheetCash, Cash Equivalents and Short-Term Investments
32.88M6.80M16.67M54.65M30.66M30.27M
Total Assets
6.60B6.42B6.25B5.69B4.67B4.62B
Total Debt
3.15B3.03B2.71B2.24B2.62B2.52B
Net Debt
3.12B3.02B2.70B2.19B2.59B2.49B
Total Liabilities
4.32B4.05B3.87B3.42B3.48B3.18B
Stockholders Equity
2.12B2.24B2.36B2.28B1.19B1.44B
Cash FlowFree Cash Flow
-420.73M-477.14M-408.24M630.59M169.79M66.01M
Operating Cash Flow
623.54M620.34M1.02B1.70B859.00M575.70M
Investing Cash Flow
-725.04M-1.08B-1.42B-1.10B-550.82M-511.20M
Financing Cash Flow
276.62M454.07M362.97M-576.72M-307.80M-52.76M

Comstock Resources Technical Analysis

Technical Analysis Sentiment
Positive
Last Price23.75
Price Trends
50DMA
21.01
Positive
100DMA
20.07
Positive
200DMA
16.56
Positive
Market Momentum
MACD
0.83
Positive
RSI
60.42
Neutral
STOCH
50.00
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 23.75 is above the 20-day moving average (MA) of 23.56, above the 50-day MA of 21.01, and above the 200-day MA of 16.56, indicating a bullish trend. The MACD of 0.83 indicates Positive momentum. The RSI at 60.42 is Neutral, neither overbought nor oversold. The STOCH value of 50.00 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
82
Outperform
$5.45B5.8419.20%2.35%21.73%1.48%
76
Outperform
$5.31B6.1612.64%5.33%31.71%-32.13%
MGMGY
74
Outperform
$4.24B10.9220.85%2.54%8.78%0.56%
CNCNX
64
Neutral
$4.62B9.01-7.30%22.23%-130.65%
63
Neutral
$3.48B16.69-16.01%10.44%-139.05%
57
Neutral
$7.22B3.11-4.49%5.63%0.82%-49.15%
CRCRK
52
Neutral
$6.98B-14.17%0.66%-1.73%-608.98%
* Energy Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
CRK
Comstock Resources
23.75
12.03
102.65%
CNX
CNX Resources
31.20
5.56
21.68%
MTDR
Matador Resources
45.01
-12.20
-21.32%
MGY
Magnolia Oil & Gas
22.31
-1.48
-6.22%
CHRD
Chord Energy
92.53
-66.50
-41.82%
GPOR
Gulfport Energy
190.55
30.62
19.15%

Comstock Resources Corporate Events

Executive/Board ChangesShareholder MeetingsBusiness Operations and Strategy
Comstock Resources Approves Key Proposals at Annual Meeting
Positive
Jun 3, 2025

On June 3, 2025, Comstock Resources held its annual stockholders meeting where several key proposals were approved. The stockholders voted to amend the 2019 Long-term Incentive Plan by increasing available shares, extending its term, and expanding eligibility to all employees and non-employee directors. Additionally, the re-election of five board members and the ratification of Ernst & Young LLP as the independent auditor for 2025 were confirmed, indicating strong shareholder support and a strategic focus on long-term growth.

The most recent analyst rating on (CRK) stock is a Sell with a $9.00 price target. To see the full list of analyst forecasts on Comstock Resources stock, see the CRK Stock Forecast page.

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.