COMSTOCK RESOURCES, INC. (CRK): what the price assumes

In the published model solve dated 2026-Q2, anchored at $14.29, COMSTOCK RESOURCES, INC. (CRK) is priced for -2.1% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-25.

Generated: 2026-08-30 · Source: https://boothcheck.com/report/CRK

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 9: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 8.9% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range (limited comparison data)

Valuation X-Ray

The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Asset, Earnings, Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 5.9%); the inversion above states its own rate.

Per-Model Detail (n=13)

Economic-Unit Decomposition (Sum Of The Parts)

Only one reportable economic unit is present in the current topology source. Consolidated operating lenses remain available, but there is no multi-unit decomposition.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Bullet Takeaways

• Comstock is a single-commodity bet on Haynesville natural gas, holding proved reserves of 7.0 Tcfe with a PV 10 Value of $4.5 billion as of December 31, 2025 based on SEC prices across roughly 1.07 million gross acres in North Louisiana and East Texas.
• Spending runs ahead of cash generation: capital expenditures and acquisitions of 415.8 million dollars in the first quarter of 2026 against 272.0 million of cash from operations, with the difference drawn on the bank credit facility.
• Reported profit swings on hedge marks rather than production, so the number to watch is the underlying one: first-quarter net income of 112.5 million dollars included an 82.8 million pre-tax unrealized hedging gain, and stripped of that the quarter earned 44.5 million.

Bull Case

Ninety-three cents. That is what it cost Comstock to get a thousand cubic feet of gas equivalent out of the ground and into a pipeline in the first quarter of 2026, split between 43 cents of gathering and transportation, 29 cents of lease operating, 10 cents of production taxes and 11 cents of cash overhead. Everything else about this company is downstream of that figure. When the cost of production is that low, the gas price does not determine whether the business makes money. It determines how much.

The evidence of that leverage is in the swing. Operating income for 2025 came to 645.9 million dollars on total revenues of 2.22 billion, against an operating loss of 168.6 million the year before, on essentially the same asset base. First-quarter 2026 operating income was 174.9 million dollars, up from 126.2 million a year earlier. The company reported an unhedged operating margin of 78% for the quarter, 73% after hedging. Those are not the economics of a marginal producer.

Location does real work here. The 10-K makes the argument plainly, citing Proximity to premium natural gas markets where Our natural gas production benefits from the strong regional Gulf Coast demand growth driven by a substantial increase in LNG exports, exports to Mexico and new or expanded petrochemical facilities. Gas is a local commodity priced by pipeline geography. A producer sitting a short haul from the export terminals sells into the demand that is growing rather than the demand that is not, and captures a better netback for the same molecule.

Then there is the resource that is not yet in the reserve report. Comstock has been extending the play westward into deeper rock, and the drilling results are landing: six Western Haynesville wells turned to sales in the first quarter at an average initial rate of 29 million cubic feet per day on an average lateral of 10,874 feet, alongside ten legacy Haynesville wells averaging 31 million cubic feet per day. The acreage position runs to 1,069,991 gross acres (802,769 net) prospective for Haynesville and Bossier, and proved reserves were only 41% developed at year end with a reserve life near 16 years. Undeveloped acreage that drills like that is the part of the story no trailing multiple can hold.

Funding took a step forward in June. Comstock sold a 27% non-controlling stake in its midstream subsidiary, Pinnacle Gas Services, to funds managed by Sixth Street for 600 million dollars, keeping 73% and continuing to operate it, and used the proceeds to retire Pinnacle's preferred equity for 445 million plus accrued dividends along with all of Pinnacle's outstanding debt. Selling a minority slice of the gathering system to fund the gathering system is a cleaner trade than issuing equity at the parent, and it takes a preferred claim off the structure entirely.

The bear will point at the borrowings, and the bear is not wrong. But the gathering assets that consumed capital are now partly funded by an outside investor, the wells being drilled are producing at rates the company can show well by well, and the cost structure means every dollar of gas price improvement lands almost entirely in operating profit. That is the shape of the bet.

Bear Case

Start with who owns this company. In March 2024, the Company issued 12,500,000 shares of common stock in a private placement to two entities controlled by Comstock's majority stockholder, receiving proceeds of $100.5 million. Following the issuance, Comstock's majority stockholder's beneficial ownership in the Company increased to 67%. As a result of open market purchases made by the Company's majority stockholder during the third quarter of 2024, beneficial ownership increased to 71%. The stock held by everyone else was worth 2.2 billion dollars at the mid-2025 measurement date the filing uses. Minority holders here do not vote on anything that matters, and when the company needed equity it went to the control holder rather than to the market. That can be benign. It is never neutral.

What that ownership structure has been financing is a spending programme larger than the cash the business produces. Comstock spent 1.05 billion dollars on exploration and development in 2025 and put total cash capital expenditures at 1.34 billion, and it expects to spend approximately 1.4 to 1.5 billion in 2026. In the first quarter of 2026 the pattern held: 415.8 million dollars out the door on capital expenditures and acquisitions against 272.0 million of cash from operations, with 387 million drawn on the bank credit facilities and 250 million repaid. The shortfall is funded, quarter after quarter, by lenders.

The interest on that is not small. Interest expense was 222.8 million dollars in 2025 against 210.6 million in 2024, and net borrowings sit near 2.9 billion dollars with almost no cash held against them. There is no dividend. The share count has grown about 6% a year over the last four years. An equity holder in this structure is funding development, paying the lenders first, and receiving nothing back in cash while they wait.

Now the part that makes the stock look cheap, and why it should be read carefully. Reported earnings for a hedged gas producer include the mark-to-market on hedges that have not settled, and those marks move violently. First-quarter 2026 net income of 112.5 million dollars contained a pre-tax unrealized hedging gain of 82.8 million; the company's own adjusted figure for the quarter was 44.5 million, or 15 cents a share against 38 cents reported. The prior-year quarter ran the other way, with a 330.3 million dollar derivative loss producing a reported loss. Any valuation that capitalizes the last twelve months of reported profit is capitalizing a hedge book as much as a gas field.

Set against filed reserve value, the price looks less like a discount. Proved reserves carried a PV 10 value of 4.5 billion dollars at year-end SEC prices, or 5.2 billion using the futures strip. Against roughly 2.9 billion dollars of net borrowings, that leaves a proved-reserve residual well under the current market value of the equity. The gap is the undeveloped acreage and the Western Haynesville extension, which may well be worth it. But that is the position: the developed, audited, discounted part of the asset base does not on its own account for the price, and the balance rests on wells not yet drilled at gas prices not yet realised. In a business where EQT reported a 46.6% operating margin and GPOR 49.1% on their own filed numbers, Comstock's margin is respectable rather than commanding, which is not the profile that earns the benefit of the doubt on undeveloped acreage.

Valuation

Put the equity and the borrowings together and Comstock's enterprise carries a value near 7.0 billion dollars. Against the 645.9 million dollars of operating profit reported for 2025 that is a little over ten times; against 2024, when the same rock and the same wells produced an operating loss of 168.6 million, it is not a multiple at all. That is the difficulty with pricing a gas producer in one sentence. The denominator is set by a commodity price nobody controls, and last year's version of it tells you very little about next year's.

Every family of method lands above today's price, and the reason is the same in each case. The peer-multiple lenses apply sector multiples to a strong trailing year. The asset lenses start from book value and add a return on equity earned during that same year. The earnings-power approach capitalizes an average of recent operating profit. Run any of them on 2025 and the answer comes back generous; run them on 2024 and most would not produce a number at all. This is the cyclical's oldest trap, and the pattern across the methods is not evidence of a bargain so much as evidence that they are all reading the same peak.

What the price actually requires is that the current earning power roughly persist. Not compound aggressively, not double: persist, through a commodity cycle, while the company spends 1.4 to 1.5 billion dollars a year developing new wells. The recent record shows how much that assumption carries. Operating profit went from 226.6 million dollars in 2023 to a loss in 2024 to 645.9 million in 2025, which is the same asset base producing three completely different answers in three years.

The reserve report offers the one check that does not depend on a multiple. Proved reserves of 7.0 Tcfe carried a PV 10 value of 4.5 billion dollars at year-end SEC prices, 5.2 billion on the futures strip, with 41% of those reserves developed. Deduct borrowings of roughly 2.9 billion dollars and what remains for shareholders on proved reserves alone sits below the market value of the equity. The market is paying for the undeveloped locations, which is a defensible thing to pay for in a play this size, but it should be understood as what is being bought.

Solvency is where the cycle bites. Cash on hand is negligible, interest expense ran 222.8 million dollars in 2025, and the drilling programme consumes more than operations generate. June's sale of a 27% interest in the Pinnacle midstream subsidiary brought in 600 million dollars and retired a preferred claim, which helps at the subsidiary level. The parent's obligations are unchanged. A gas producer with low unit costs and a heavy balance sheet is a leveraged position on the commodity in both directions, and that symmetry, not the trailing multiple, is what the price is really expressing.

Catalysts

The most consequential recent event was structural rather than operational. On June 15, 2026 Comstock sold a 27% non-controlling common equity interest in Pinnacle Gas Services, its midstream subsidiary, to funds managed by Sixth Street for 600 million dollars, retaining 73% and continuing to manage and operate the business under a services agreement. The proceeds fully extinguished Pinnacle's preferred equity securities for 445 million dollars plus accrued dividends, retired all outstanding Pinnacle indebtedness, and covered transaction costs and working capital. That transaction closed after the March quarter-end balance sheet, so the reported capital structure does not yet reflect it.

First-quarter results, reported May 5, 2026, gave the cleanest recent read on operations. Natural gas and oil sales including realized hedging losses were 339 million dollars, with realized hedging losses of 80.4 million; operating cash flow excluding working capital changes was 191.9 million, or 66 cents a share; adjusted EBITDAX was 251 million; and reported net income was 112.5 million, or 38 cents a diluted share, against adjusted net income of 44.5 million, or 15 cents. Comstock drilled 17 operated horizontal wells in the quarter and turned 13 to sales, including six Western Haynesville wells with initial production rates averaging 29 million cubic feet per day.

The 2026 spending plan is the number that governs the rest of the year. Management expects to spend approximately 1.4 to 1.5 billion dollars on development and exploration, up from 1.34 billion of total cash capital expenditures in 2025. At the first quarter's pace that programme runs ahead of operating cash flow, so each subsequent quarterly report is as much a funding update as an earnings one: the gas price realised, the hedge settlements, and the revolver balance together determine whether the drilling schedule holds.

Peer Cohorts (Per Segment, With Filing Citations)

Natural gas and oil E&P (single reportable segment) (reported)

• EQT (EQT Corporation)
• FY2025 10-K: …predominantly from the transportation of natural gas in Pennsylvania and West Virginia. The Company is not dependent on any single third-party customer and believes that the loss of any one customer would not have a significant adverse effect on the Company's ability to generate revenues through its gathering,…
• FY2025 10-K: …three reportable segments consisting of Upstream, Gathering and Transmission. Effective as of December 31, 2025, we renamed our previously reported "Production" segment as the "Upstream" segment to better align with the nature of our operations and our internal reporting framework. This change had no impact on the…
• AR (ANTERO RESOURCES CORPORATION)
• FY2025 10-K: ​ (a) Disaggregation of Revenue ​ The table set forth below presents revenue disaggregated by type and reportable segment to which it relates (in thousands). See Note 17-Reportable Segments for additional information on reportable segments. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ ​ ​ 2023 ​…
• FY2025 10-K: …Corporation's consolidated financial statements. ​ 55 Table of Contents Exploration and Production Segment The following table sets forth selected operating data of the exploration and production segment: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ Amount of ​ ​ ​ ​ ​ ​ December 31, ​ Increase ​ Percent ​ ​ ​ ​ ​…
• RRC (RANGE RESOURCES CORPORATION)
• FY2025 10-K: …taxes). Revenues are based on a twelve-month unweighted average of the first day of the month pricing, without escalation. Future cash flows are reduced by estimated production costs, administrative costs, costs to develop and produce the proved reserves and abandonment costs, all based on current economic conditions…
• FY2025 10-K: -traditional sources. During the year ended December 31, 2025, we did not file any reports with any federal authority or agency with respect to our estimate of natural gas, NGLs and oil reserves. Additionally, we do not provide optional disclosures of probable or possible reserves. Summary of Oil and Gas Reserves as…
• CNX (CNX Resources Corporation)
• FY2025 10-K: …Natural Gas, NGLs and Oil Revenue are sales of $ 180,039 to Citadel Energy Marketing LLC and $ 165,465 to NRG Business Marketing LLC, each of which comprises over 10% of revenue from contracts with external customers for the period. (H) Includes midstream revenue of $ 66,559 and equity in earnings of unconsolidated…
• FY2025 10-K: …other companies. 46 Non-GAAP Financial Measures Reconciliation For the Years Ended December 31, (Dollars in millions) 2025 2024 Total Revenue and Other Operating Income $ 2,239 $ 1,267 (Deduct) Add: Purchased Gas Revenue (45) (59) (Gain) Loss on Commodity Derivative Instruments - Unrealized (278) 453 Other Revenue…
• GPOR (Gulfport Energy Corporation)
• FY2025 10-K: …will have on its financial disclosures. 2. SEGMENT INFORMATION The Company's assets and operations consist of one reportable segment with all revenues, operating expenses and assets attributable to this segment reflected in the consolidated financial statements. The Company derives its revenue from the sale of…
• FY2025 10-K: MBbl. One thousand barrels of crude oil, condensate or natural gas liquids. Mcf . One thousand cubic feet of natural gas. Mcfe. One thousand cubic feet of natural gas equivalent, with one barrel of NGL and crude oil being equivalent to 6,000 cubic feet of natural gas. MMBbl. One million barrels of crude oil,…
• EXE (EXPAND ENERGY CORPORATION)
• FY2025 10-K: …each period until the liability is settled or the well is sold, at which time the liability is removed. The related asset retirement cost is capitalized as part of the carrying amount of our natural gas and oil properties. See Note 16 for further discussion of asset retirement obligations. Revenue Recognition Revenue…
• FY2025 10-K: …actual results to be materially different than those expressed in our forward-looking statements include: • Reduced demand for natural gas, oil and natural gas liquids; • negative public perceptions of our industry; • competition in the natural gas and oil exploration and production industry; • the volatility of…
• MTDR (Matador Resources Company)
• FY2025 10-K: …reserves are reported in two streams: oil and natural gas, including both dry and liquids-rich natural gas. Where we produce liquids-rich natural gas, primarily in the Delaware Basin, the economic value of the NGLs associated with the natural gas is included in the estimated wellhead natural gas price on those…
• FY2025 10-K: 6 Robert T. Macalik (Principal Financial Officer) /s/ Benjamin T. Colodney Senior Vice President and Chief Accounting Officer February 26, 2026 Benjamin T. Colodney (Principal Accounting Officer) /s/ Shelley F. Appel Director February 26, 2026 Shelley F. Appel /s/ Reynald A. Baribault Director February 26, 2026…
• BKV (BKV CORPORATION)
• FY2025 10-K: 184,347 Natural gas liquids (MBbls) 183,504 Producing 163,078 Non-producing 20,426 Oil (MBbls) 1,760 Producing 1,597 Non-producing 163 Total estimated proved developed reserves (MMcfe) 4,268,371 Producing 3,960,490 Non-producing 307,881 Estimated proved undeveloped reserves at NYMEX Strip Pricing: Natural gas (MMcf)…
• FY2025 10-K: …natural gas. The Company maintains control of the natural gas during gathering, compression, processing, and transportation. Upon delivery of the product, the Company transfers control and recognizes revenue based on the contract price. In this scenario, the Company is the principal, and revenues are recognized on a…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.