Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 13 Jun, 25 | CRK | Buy | USD 25.62 | USD 27.5 | USD 29.0 | 4 days | Closed |
12.72%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
Comstock Resources, Inc., an independent energy company, engages in the acquisition, exploration, development, and production of oil and natural gas primarily in North Louisiana and East Texas, the United States. The company was incorporated in 1919 and is based in Frisco, Texas.
Olajuwon Pickens #1 initial production rate of 41 MMcf per day highlights substantial success in expanding the company’s productive acreage in the Western Haynesville.
Adjusted EBITDAX of $293 million indicates strong cash generation and profitability before certain non-cash charges and financial costs
Pre-tax $322.4 million unrealized loss on hedging contracts demonstrates the adverse impact of rising natural gas prices on existing risk management positions.
Net loss of $115.4 million for the quarter, driven by unrealized hedging losses, reflects significant exposure to market price movements
Comstock faces significant exposure to natural gas price volatility, particularly through unrealized losses on its hedging portfolio, which can materially affect reported earnings and cash flow
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 25.62 | 21.9 | 27.5 | 29.0 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Stronger Financial Performance Driven by Higher Natural Gas Prices
Comstock Resources delivered improved financial results in the first quarter of 2025, largely attributable to stronger natural gas prices. The company reported natural gas and oil sales, including realized hedging gains, totaling $405 million for the quarter. Operating cash flow reached $239 million, translating to $0.81 per diluted share, while adjusted EBITDAX stood at $293 million. Despite headwinds from unrealized hedging losses, adjusted net income for the period was $53.8 million, or $0.18 per diluted share.
Production and Sales Overview
In the first quarter of 2025, Comstock produced 115 Bcf of natural gas, achieving an average realized price of $3.58 per Mcf before hedging and $3.52 per Mcf after hedging. Natural gas and oil sales rose to $405.0 million, reflecting the favorable price environment despite realized hedging losses of $8.0 million. The company reported an operating margin of 77% before hedging and 76% after hedging, underscoring efficient operations even in a volatile pricing environment.
Net Loss Impacted by Unrealized Hedging Losses
While operational performance was strong, Comstock reported a net loss of $115.4 million, or $0.40 per share, for the quarter. This was primarily driven by a pre-tax $322.4 million unrealized loss on hedging contracts related to the rise in future natural gas prices since the end of 2024. Adjusting for this item and exploration expense, the company posted a more favorable adjusted net income of $53.8 million for the period.
Cost Structure and Operating Efficiency
Comstock maintained a competitive production cost profile during the quarter, averaging $0.83 per Mcfe. This comprised $0.37 for gathering and transportation, $0.30 for lease operating expenses, $0.10 for production and other taxes, and $0.06 for cash general and administrative expenses. The cost management contributed to the company’s strong operating margin, positioning it well for sustained profitability under stable market conditions.
Successful Drilling and Completion Activity
Resuming completion activity in late 2024, Comstock brought fourteen (11.3 net) operated Haynesville/Bossier shale wells online since its last update. These wells demonstrated strong performance, averaging initial production rates of 25 MMcf per day with average completed lateral lengths of 12,220 feet. Notably, the Olajuwon Pickens #1 well, the company’s first Western Haynesville well in Freestone County, achieved an initial production rate of 41 MMcf per day, significantly extending the successful delineation of its Western Haynesville acreage.
Liquidity Position and Credit Facility Update
Comstock’s liquidity position remains robust, supported by the reaffirmation of its $2.0 billion borrowing base under its $1.5 billion revolving credit facility, as announced on April 29, 2025. This affirmation reflects confidence from the company’s banking group and provides a solid foundation for ongoing operational and development activities.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given on Comstock Resources Inc (NYSE: CRK) at the closing market price of USD 25.62, as on June 12, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Energy Industry: Oil & Gas E&P
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| CRK Comstock Resources Inc |
-0.84 3.38% | 24.01 | 4.08 | 11.82 | 1.17 | 1.06 | 2.43 | 3.48 |
| COP ConocoPhillips |
-0.76 0.80% | 93.68 | 12.82 | 11.12 | 2.24 | 2.90 | 2.47 | 5.63 |
| CNQ Canadian Natural Resources Ltd |
-0.19 0.59% | 32.22 | 15.51 | 14.24 | 2.37 | 2.92 | 2.26 | 5.34 |
| EOG EOG Resources Inc |
0.27 0.22% | 123.15 | 9.09 | 8.98 | 3.01 | 2.57 | 2.97 | 5.16 |
| PEXNY PTT Exploration & Production |
- -% | 10.25 | 25.79 | 24.51 | 5.92 | 3.66 | 0.05 | 0.08 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is Jun 12,2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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