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 |
|
*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.
Disclaimer :
This report has been issued by StockNextt which has an Ontario Business Identification Number 1000958347 and British Columbia registration Number FM1051529 is a trade name under Kalkine Canada Advisory Services Inc. having Business Number 761925130BC0001. Kalkine Canada Advisory Services Inc. and StockNextt are collectively referred to as “StockNextt”, “we”, “us”, and “our”. The website https://stocknextt.com and associated pages are published by StockNextt. The information in this report and on the StockNextt website has been prepared from a wide variety of sources, which StockNextt, to the best of its knowledge and belief, considers accurate. StcokNextt has made every effort to ensure the reliability of information contained in its reports, newsletters, and websites. All information represents our views at the date of publication and may change without notice. The information in this report does not constitute an offer to sell securities or other financial products or a solicitation of an offer to buy securities or other financial products. Our reports contain general recommendations for investing in securities and other financial products. StockNextt does not offer financial advice based upon your personal financial situation or goals, and we shall not be held liable for any investment or trading losses you may incur by using the opinions expressed in our reports, publications, market updates, news alerts and corporate profiles. StockNextt does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation. StockNextt’s general advice does not in any way endorse or recommend individuals, investment products or services for your personal financial situation. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a professional authorised financial planner and adviser. You should be aware that the value of any investment and the income from it can go down as well as up and you may not get back the amount invested. Please also read our Terms and conditions for further information. Employees and/or associates of StockNextt and its related entities may hold an interest in the securities or other financial products covered in this report or on the StockNextt website. Any such employees and associates are required to comply with certain safeguards, procedures and disclosures as required by law.
Copyright © 2023 Krish Capital Pty Ltd. All rights reserved. No part of this website, or its content, may be reproduced in any form without our prior consent.