Last Update 09 Dec 25

Fair value Increased 4.95%

CRK: Secular Gas Demand Will Not Offset Weaker Returns Outlook

Analysts have nudged their fair value estimate for Comstock Resources higher, lifting the price target by nearly $1 to reflect slightly lower discount rates, stronger expected revenue growth and higher future valuation multiples, even as near term Street targets such as the recent move to $9 continue to embed caution around margins and capital efficiency.

Analyst Commentary

Street research remains divided on the appropriate risk premium and growth trajectory for Comstock Resources, with recent target changes highlighting both the potential upside from secular gas demand and the execution risks tied to capital deployment.

While some valuation models are being revised modestly higher on improved revenue growth assumptions and lower discount rates, others are trimming price targets to reflect lingering uncertainty around near term returns on invested capital and cash flow visibility.

Bullish Takeaways

Bullish analysts point to the secular demand story for natural gas, particularly from power generation and data centers, as a structural tailwind that can support higher long term volumes and more resilient cash flows.
Improving sentiment toward exploration and production operators with scale in key gas basins is viewed as a catalyst for multiple expansion if Comstock can demonstrate consistent execution against its development plan.
Expectations for continued industry M&A and portfolio rationalization create optionality for value accretion, whether through potential asset sales at attractive metrics or participation in basin level consolidation.
The FY26 focus on capital efficiency provides a medium term framework for operating improvements that, if delivered, could justify higher net asset value estimates and support a rerating from current depressed levels.

Bearish Takeaways

Bearish analysts see the recent price target reductions as evidence that near term returns remain constrained, with current strip pricing and spending plans limiting the pace of deleveraging and free cash flow growth.
There is concern that, despite the constructive long term demand narrative, the timing and magnitude of gas price improvement are uncertain, which could pressure earnings and keep valuation anchored below peer averages.
Questions persist around the sustainability of capital efficiency gains, as higher service costs, evolving regulatory requirements and the need for ongoing exploration may dilute the anticipated uplift to margins.
Heightened focus on international exposure and diversified revenue streams across the sector underscores Comstock’s concentration risk in U.S. onshore gas, which some view as a constraint on its relative growth and multiple expansion.

What's in the News

Reported third quarter 2025 natural gas production of 111,770 MMcf, down from 133,116 MMcf in the prior year period, with oil volumes also lower at 11 Mbbls versus 13 Mbbls. This resulted in total production declining to 111,837 MMcfe from 133,198 MMcfe (company announcement).
For the first nine months of 2025, natural gas production fell to 338,963 MMcf from 403,420 MMcf a year earlier, with oil production down to 34 Mbbls from 40 Mbbls. This drove total production to 339,166 MMcfe compared with 403,662 MMcfe in the prior year period (company announcement).

Valuation Changes

The fair value estimate has risen slightly, moving from approximately $19.46 to $20.43 per share, reflecting modestly stronger long term assumptions.
The discount rate has edged lower, declining from about 7.02 percent to 6.96 percent, which implies a marginally reduced risk premium in the valuation model.
Revenue growth has increased modestly, with the long run forecast moving from roughly 13.30 percent to 14.44 percent annually.
The net profit margin has fallen slightly, easing from about 14.95 percent to 13.95 percent, indicating somewhat lower expected profitability on future sales.
The future P/E multiple has risen moderately, moving from roughly 17.86x to 19.46x, suggesting a higher assumed valuation on forward earnings.

Dominant Western Haynesville positioning and advanced drilling techniques are driving efficiency, higher margins, and expanded sales opportunities.
Strategic partnerships, infrastructure investments, and asset monetization are strengthening liquidity, enabling reinvestment, and unlocking new long-term revenue channels.
Heavy reliance on a single production area and lack of geographic diversification increase operational and financial risks, particularly amid shifting regulatory and market trends.

Catalysts

About Comstock Resources

An independent energy company, engages in the acquisition, exploration, development, and production of natural gas and oil properties in the United States.What are the underlying business or industry changes driving this perspective?

Comstock's dominant, expanding acreage position in the Western Haynesville-a core U.S. natural gas basin with high-pressure, high-thickness formations-is expected to result in significantly higher resource potential and future sales volumes as global energy demand rises, directly benefiting revenue and long-term earnings.
Continued optimization of drilling and completion techniques, including the use of longer laterals, horseshoe well design, and refined frac stage spacing, is already yielding meaningfully lower per-unit drilling and completion costs; further anticipated efficiency gains will support higher net margins and greater free cash flow.
The company's proactive development of Western Haynesville-specific midstream infrastructure (such as a major new gas treating plant) will allow for higher production levels, improved price realizations, and increased ability to capitalize on expanding U.S. LNG export capacity, thereby supporting revenue growth.
The recently announced strategic collaboration with NextEra Energy for potential gas-fired power and data center projects near Western Haynesville leverages proximity to major demand centers and existing infrastructure; this could unlock new high-margin, long-term sales channels and provide additional stable cash flows.
Planned monetization of non-core Haynesville acreage at attractive valuations, empowered by robust Legacy and Western drilling inventories, will generate liquidity to deleverage the balance sheet-lowering interest costs and improving net income-while reinforcing the company's financial flexibility to reinvest in high-return core assets.

Comstock Resources Earnings and Revenue Growth

Comstock Resources Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Comstock Resources's revenue will grow by 14.6% annually over the next 3 years.
Analysts assume that profit margins will increase from -4.4% today to 29.4% in 3 years time.
Analysts expect earnings to reach $733.2 million (and earnings per share of $1.29) by about September 2028, up from $-72.6 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 9.6x on those 2028 earnings, up from -63.9x today. This future PE is lower than the current PE for the US Oil and Gas industry at 12.8x.
Analysts expect the number of shares outstanding to grow by 0.28% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.79%, as per the Simply Wall St company report.

Comstock Resources Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Heavy concentration of production and capital in the Haynesville shale, particularly the Legacy area (over 80% of current production), creates vulnerability to regional oversupply, basis differentials, and commodity price volatility, potentially impacting revenue and net margins in periods of unfavorable market conditions.
Continuous need for significant capital investment in drilling, completion, and midstream infrastructure-along with periodic rises in well costs due to operational challenges or drilling complexities-could strain free cash flow and require asset sales or higher debt, impacting future earnings and balance sheet strength.
Declines in quarterly and half-year production volumes (down 14–15% year-over-year due to rig reductions and deferred completions) highlight exposure to production slowdowns and prove the reliance on timely execution, increasing risk to revenue stability and EBITDA if operational delays persist.
Lack of material geographic diversification beyond the Haynesville exposes the company to adverse regulatory changes, tightening methane emission standards, or local opposition-any of which could increase compliance costs and reduce long-term operating margins and earnings.
Long-term global trends toward renewables, electrification, and stricter ESG capital scrutiny may reduce demand for natural gas, restrict access to low-cost financing, or erode pricing power, leading to long-term pressure on Comstock's revenue base and net income growth.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $19.036 for Comstock Resources based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $32.0, and the most bearish reporting a price target of just $10.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $2.5 billion, earnings will come to $733.2 million, and it would be trading on a PE ratio of 9.6x, assuming you use a discount rate of 7.8%.
Given the current share price of $15.81, the analyst price target of $19.04 is 16.9% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Refined Western Haynesville Drilling Will Unlock Enduring Resource Potential