Intrinsic value of Comstock Resources - CRK

Previous Close

$11.02

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$11.02

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of CRK stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -30.16
  45.30
  41.27
  37.64
  34.38
  31.44
  28.80
  26.42
  24.28
  22.35
  20.61
  19.05
  17.65
  16.38
  15.24
  14.22
  13.30
  12.47
  11.72
  11.05
  10.44
  9.90
  9.41
  8.97
  8.57
  8.21
  7.89
  7.60
  7.34
  7.11
  6.90
Revenue, $m
  176
  371
  523
  720
  968
  1,273
  1,639
  2,072
  2,575
  3,150
  3,800
  4,524
  5,322
  6,194
  7,138
  8,153
  9,237
  10,389
  11,606
  12,889
  14,235
  15,644
  17,116
  18,651
  20,250
  21,913
  23,643
  25,441
  27,309
  29,250
  31,268
Variable operating expenses, $m
 
  757
  1,070
  1,473
  1,979
  2,601
  3,350
  4,235
  5,263
  6,439
  7,767
  9,246
  10,878
  12,660
  14,590
  16,665
  18,881
  21,235
  23,723
  26,345
  29,096
  31,976
  34,985
  38,123
  41,391
  44,791
  48,326
  52,001
  55,819
  59,788
  63,912
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  170
  757
  1,070
  1,473
  1,979
  2,601
  3,350
  4,235
  5,263
  6,439
  7,767
  9,246
  10,878
  12,660
  14,590
  16,665
  18,881
  21,235
  23,723
  26,345
  29,096
  31,976
  34,985
  38,123
  41,391
  44,791
  48,326
  52,001
  55,819
  59,788
  63,912
Operating income, $m
  5
  -387
  -546
  -752
  -1,011
  -1,329
  -1,711
  -2,163
  -2,688
  -3,289
  -3,967
  -4,723
  -5,556
  -6,466
  -7,452
  -8,512
  -9,644
  -10,846
  -12,117
  -13,456
  -14,861
  -16,332
  -17,869
  -19,472
  -21,141
  -22,877
  -24,683
  -26,560
  -28,511
  -30,537
  -32,644
EBITDA, $m
  146
  -285
  -402
  -554
  -744
  -978
  -1,260
  -1,593
  -1,979
  -2,421
  -2,920
  -3,477
  -4,090
  -4,761
  -5,486
  -6,266
  -7,100
  -7,985
  -8,921
  -9,906
  -10,941
  -12,024
  -13,155
  -14,335
  -15,564
  -16,843
  -18,172
  -19,554
  -20,990
  -22,482
  -24,033
Interest expense (income), $m
  105
  151
  140
  208
  296
  407
  543
  706
  900
  1,125
  1,382
  1,672
  1,995
  2,352
  2,741
  3,163
  3,616
  4,101
  4,615
  5,159
  5,732
  6,333
  6,963
  7,620
  8,306
  9,020
  9,763
  10,536
  11,339
  12,174
  13,041
Earnings before tax, $m
  -128
  -538
  -686
  -960
  -1,307
  -1,735
  -2,254
  -2,870
  -3,588
  -4,414
  -5,349
  -6,394
  -7,551
  -8,818
  -10,193
  -11,675
  -13,260
  -14,946
  -16,732
  -18,615
  -20,593
  -22,666
  -24,832
  -27,092
  -29,447
  -31,898
  -34,447
  -37,096
  -39,850
  -42,711
  -45,685
Tax expense, $m
  7
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -135
  -538
  -686
  -960
  -1,307
  -1,735
  -2,254
  -2,870
  -3,588
  -4,414
  -5,349
  -6,394
  -7,551
  -8,818
  -10,193
  -11,675
  -13,260
  -14,946
  -16,732
  -18,615
  -20,593
  -22,666
  -24,832
  -27,092
  -29,447
  -31,898
  -34,447
  -37,096
  -39,850
  -42,711
  -45,685

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  66
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  890
  1,352
  1,910
  2,629
  3,533
  4,644
  5,982
  7,562
  9,398
  11,498
  13,868
  16,510
  19,423
  22,605
  26,051
  29,755
  33,712
  37,915
  42,359
  47,039
  51,952
  57,095
  62,467
  68,070
  73,905
  79,976
  86,288
  92,849
  99,668
  106,753
  114,117
Adjusted assets (=assets-cash), $m
  824
  1,352
  1,910
  2,629
  3,533
  4,644
  5,982
  7,562
  9,398
  11,498
  13,868
  16,510
  19,423
  22,605
  26,051
  29,755
  33,712
  37,915
  42,359
  47,039
  51,952
  57,095
  62,467
  68,070
  73,905
  79,976
  86,288
  92,849
  99,668
  106,753
  114,117
Revenue / Adjusted assets
  0.214
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
Average production assets, $m
  919
  1,020
  1,442
  1,984
  2,666
  3,505
  4,514
  5,706
  7,091
  8,676
  10,465
  12,458
  14,657
  17,058
  19,658
  22,453
  25,439
  28,611
  31,964
  35,496
  39,203
  43,084
  47,138
  51,365
  55,768
  60,349
  65,113
  70,064
  75,209
  80,555
  86,112
Working capital, $m
  -2
  -183
  -259
  -356
  -478
  -629
  -810
  -1,024
  -1,272
  -1,556
  -1,877
  -2,235
  -2,629
  -3,060
  -3,526
  -4,028
  -4,563
  -5,132
  -5,734
  -6,367
  -7,032
  -7,728
  -8,455
  -9,214
  -10,003
  -10,825
  -11,680
  -12,568
  -13,491
  -14,450
  -15,446
Total debt, $m
  1,045
  1,028
  1,530
  2,178
  2,991
  3,991
  5,195
  6,617
  8,269
  10,159
  12,292
  14,670
  17,292
  20,156
  23,257
  26,591
  30,152
  33,935
  37,934
  42,146
  46,568
  51,197
  56,032
  61,074
  66,325
  71,789
  77,470
  83,375
  89,512
  95,889
  102,516
Total liabilities, $m
  1,161
  1,217
  1,719
  2,366
  3,180
  4,180
  5,384
  6,806
  8,458
  10,348
  12,481
  14,859
  17,481
  20,345
  23,446
  26,780
  30,341
  34,124
  38,123
  42,335
  46,757
  51,385
  56,221
  61,263
  66,514
  71,978
  77,659
  83,564
  89,701
  96,078
  102,705
Total equity, $m
  -271
  135
  191
  263
  353
  464
  598
  756
  940
  1,150
  1,387
  1,651
  1,942
  2,261
  2,605
  2,976
  3,371
  3,792
  4,236
  4,704
  5,195
  5,709
  6,247
  6,807
  7,390
  7,998
  8,629
  9,285
  9,967
  10,675
  11,412
Total liabilities and equity, $m
  890
  1,352
  1,910
  2,629
  3,533
  4,644
  5,982
  7,562
  9,398
  11,498
  13,868
  16,510
  19,423
  22,606
  26,051
  29,756
  33,712
  37,916
  42,359
  47,039
  51,952
  57,094
  62,468
  68,070
  73,904
  79,976
  86,288
  92,849
  99,668
  106,753
  114,117
Debt-to-equity ratio
  -3.856
  7.600
  8.010
  8.280
  8.470
  8.590
  8.680
  8.750
  8.800
  8.840
  8.860
  8.890
  8.900
  8.920
  8.930
  8.940
  8.940
  8.950
  8.960
  8.960
  8.960
  8.970
  8.970
  8.970
  8.970
  8.980
  8.980
  8.980
  8.980
  8.980
  8.980
Adjusted equity ratio
  -0.409
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -135
  -538
  -686
  -960
  -1,307
  -1,735
  -2,254
  -2,870
  -3,588
  -4,414
  -5,349
  -6,394
  -7,551
  -8,818
  -10,193
  -11,675
  -13,260
  -14,946
  -16,732
  -18,615
  -20,593
  -22,666
  -24,832
  -27,092
  -29,447
  -31,898
  -34,447
  -37,096
  -39,850
  -42,711
  -45,685
Depreciation, amort., depletion, $m
  141
  102
  144
  198
  267
  350
  451
  571
  709
  868
  1,046
  1,246
  1,466
  1,706
  1,966
  2,245
  2,544
  2,861
  3,196
  3,550
  3,920
  4,308
  4,714
  5,137
  5,577
  6,035
  6,511
  7,006
  7,521
  8,056
  8,611
Funds from operations, $m
  -40
  -436
  -542
  -762
  -1,040
  -1,385
  -1,802
  -2,299
  -2,879
  -3,546
  -4,302
  -5,149
  -6,086
  -7,112
  -8,227
  -9,429
  -10,716
  -12,085
  -13,536
  -15,065
  -16,673
  -18,357
  -20,118
  -21,956
  -23,870
  -25,863
  -27,935
  -30,090
  -32,329
  -34,655
  -37,074
Change in working capital, $m
  -16
  -57
  -76
  -97
  -122
  -150
  -181
  -214
  -248
  -284
  -321
  -358
  -394
  -431
  -466
  -501
  -536
  -569
  -602
  -633
  -665
  -696
  -727
  -758
  -790
  -822
  -854
  -888
  -923
  -959
  -997
Cash from operations, $m
  -24
  -379
  -467
  -665
  -918
  -1,234
  -1,621
  -2,085
  -2,631
  -3,262
  -3,981
  -4,791
  -5,691
  -6,682
  -7,761
  -8,928
  -10,180
  -11,517
  -12,934
  -14,432
  -16,008
  -17,661
  -19,391
  -21,197
  -23,080
  -25,041
  -27,081
  -29,202
  -31,406
  -33,696
  -36,077
Maintenance CAPEX, $m
  0
  -70
  -102
  -144
  -198
  -267
  -350
  -451
  -571
  -709
  -868
  -1,046
  -1,246
  -1,466
  -1,706
  -1,966
  -2,245
  -2,544
  -2,861
  -3,196
  -3,550
  -3,920
  -4,308
  -4,714
  -5,137
  -5,577
  -6,035
  -6,511
  -7,006
  -7,521
  -8,056
New CAPEX, $m
  -57
  -317
  -421
  -543
  -682
  -838
  -1,009
  -1,192
  -1,385
  -1,585
  -1,788
  -1,994
  -2,198
  -2,401
  -2,600
  -2,795
  -2,986
  -3,172
  -3,353
  -3,532
  -3,707
  -3,881
  -4,054
  -4,228
  -4,403
  -4,581
  -4,763
  -4,951
  -5,145
  -5,347
  -5,557
Cash from investing activities, $m
  -30
  -387
  -523
  -687
  -880
  -1,105
  -1,359
  -1,643
  -1,956
  -2,294
  -2,656
  -3,040
  -3,444
  -3,867
  -4,306
  -4,761
  -5,231
  -5,716
  -6,214
  -6,728
  -7,257
  -7,801
  -8,362
  -8,942
  -9,540
  -10,158
  -10,798
  -11,462
  -12,151
  -12,868
  -13,613
Free cash flow, $m
  -54
  -766
  -990
  -1,351
  -1,798
  -2,339
  -2,981
  -3,729
  -4,586
  -5,556
  -6,637
  -7,831
  -9,135
  -10,548
  -12,067
  -13,689
  -15,411
  -17,232
  -19,149
  -21,160
  -23,265
  -25,462
  -27,753
  -30,139
  -32,620
  -35,199
  -37,879
  -40,664
  -43,557
  -46,564
  -49,689
Issuance/(repayment) of debt, $m
  -3
  -82
  502
  647
  814
  1,000
  1,204
  1,422
  1,652
  1,890
  2,133
  2,378
  2,622
  2,864
  3,101
  3,334
  3,561
  3,783
  4,000
  4,212
  4,421
  4,629
  4,835
  5,042
  5,251
  5,464
  5,681
  5,905
  6,136
  6,377
  6,628
Issuance/(repurchase) of shares, $m
  0
  1,042
  742
  1,032
  1,397
  1,846
  2,388
  3,028
  3,772
  4,624
  5,586
  6,659
  7,843
  9,136
  10,538
  12,045
  13,656
  15,367
  17,177
  19,083
  21,084
  23,180
  25,369
  27,652
  30,030
  32,505
  35,078
  37,752
  40,531
  43,420
  46,421
Cash from financing (excl. dividends), $m  
  -15
  960
  1,244
  1,679
  2,211
  2,846
  3,592
  4,450
  5,424
  6,514
  7,719
  9,037
  10,465
  12,000
  13,639
  15,379
  17,217
  19,150
  21,177
  23,295
  25,505
  27,809
  30,204
  32,694
  35,281
  37,969
  40,759
  43,657
  46,667
  49,797
  53,049
Total cash flow (excl. dividends), $m
  -68
  193
  255
  328
  412
  507
  610
  721
  837
  958
  1,081
  1,205
  1,329
  1,452
  1,572
  1,690
  1,805
  1,918
  2,027
  2,135
  2,241
  2,346
  2,451
  2,556
  2,662
  2,770
  2,880
  2,993
  3,111
  3,233
  3,360
Retained Cash Flow (-), $m
  100
  -1,042
  -742
  -1,032
  -1,397
  -1,846
  -2,388
  -3,028
  -3,772
  -4,624
  -5,586
  -6,659
  -7,843
  -9,136
  -10,538
  -12,045
  -13,656
  -15,367
  -17,177
  -19,083
  -21,084
  -23,180
  -25,369
  -27,652
  -30,030
  -32,505
  -35,078
  -37,752
  -40,531
  -43,420
  -46,421
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  6
  9
  12
  17
  22
  29
  38
  48
  59
  72
  87
  104
  122
  142
  164
  188
  212
  239
  267
  296
  327
  360
  394
  429
  466
  504
  544
  585
  628
  673
Cash available for distribution, $m
 
  -849
  -487
  -704
  -985
  -1,340
  -1,777
  -2,307
  -2,934
  -3,665
  -4,504
  -5,453
  -6,513
  -7,685
  -8,966
  -10,355
  -11,850
  -13,449
  -15,149
  -16,948
  -18,843
  -20,834
  -22,918
  -25,096
  -27,368
  -29,735
  -32,198
  -34,759
  -37,421
  -40,187
  -43,062
Discount rate, %
 
  12.40
  13.02
  13.67
  14.35
  15.07
  15.83
  16.62
  17.45
  18.32
  19.24
  20.20
  21.21
  22.27
  23.38
  24.55
  25.78
  27.07
  28.42
  29.84
  31.33
  32.90
  34.55
  36.27
  38.09
  39.99
  41.99
  44.09
  46.29
  48.61
  51.04
PV of cash for distribution, $m
 
  -755
  -382
  -479
  -576
  -664
  -736
  -786
  -810
  -806
  -775
  -721
  -648
  -563
  -473
  -385
  -302
  -229
  -168
  -119
  -81
  -53
  -33
  -20
  -12
  -7
  -4
  -2
  -1
  0
  0
Current shareholders' claim on cash, %
  100
  50.0
  7.7
  1.2
  0.2
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Comstock Resources, Inc. is an energy company engaged in the acquisition, exploration, development and production of oil and natural gas in the United States. The Company operates in the segment of exploration and production of oil and natural gas. The Company's oil and gas operations are concentrated in Texas and Louisiana. Its operations are focused in two operating areas: East Texas/North Louisiana and South Texas. The Company's properties in the East Texas/North Louisiana region include approximately 80,660 acres in the Haynesville or Bossier shale formations. The Company's Eagleville field includes approximately 30,220 acres located in the oil window of the Eagle Ford shale in South Texas. The Company owns interests in over 1,575 producing oil and natural gas wells, and operates over 950 of these wells. The Company owns interests in over 20 wells in the Rosita field, located in Duval County, Texas.

FINANCIAL RATIOS  of  Comstock Resources (CRK)

Valuation Ratios
P/E Ratio -1.1
Price to Sales 0.9
Price to Book -0.6
Price to Tangible Book
Price to Cash Flow -6.4
Price to Free Cash Flow -1.9
Growth Rates
Sales Growth Rate -30.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -78.4%
Cap. Spend. - 3 Yr. Gr. Rate -35.8%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity -385.6%
Total Debt to Equity -385.6%
Interest Coverage 0
Management Effectiveness
Return On Assets -2.3%
Ret/ On Assets - 3 Yr. Avg. -19.4%
Return On Total Capital -14.6%
Ret/ On T. Cap. - 3 Yr. Avg. -29.1%
Return On Equity 61.1%
Return On Equity - 3 Yr. Avg. -81.6%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 60.8%
Gross Margin - 3 Yr. Avg. 69.3%
EBITDA Margin 67%
EBITDA Margin - 3 Yr. Avg. -59.2%
Operating Margin 3.4%
Oper. Margin - 3 Yr. Avg. -144.6%
Pre-Tax Margin -72.7%
Pre-Tax Margin - 3 Yr. Avg. -188.2%
Net Profit Margin -76.7%
Net Profit Margin - 3 Yr. Avg. -167.5%
Effective Tax Rate -5.5%
Eff/ Tax Rate - 3 Yr. Avg. 12.6%
Payout Ratio 0%

CRK stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CRK stock intrinsic value calculation we used $255 million for the last fiscal year's total revenue generated by Comstock Resources. The default revenue input number comes from 2016 income statement of Comstock Resources. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our CRK stock valuation model: a) initial revenue growth rate of 45.3% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 12.4%, whose default value for CRK is calculated based on our internal credit rating of Comstock Resources, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Comstock Resources.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of CRK stock the variable cost ratio is equal to 204.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for CRK stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 13.6% for Comstock Resources.

Corporate tax rate of 27% is the nominal tax rate for Comstock Resources. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the CRK stock is equal to 2.3%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for CRK are equal to 275.4%.

Life of production assets of 10 years is the average useful life of capital assets used in Comstock Resources operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for CRK is equal to -49.4%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $-369 million for Comstock Resources - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 15 million for Comstock Resources is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Comstock Resources at the current share price and the inputted number of shares is $0.2 billion.

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COMPANY NEWS

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▶ Who Are Comstock Resources Incs (CRK) Major Shareholders?   [Oct-31-17 07:45PM  Simply Wall St.]
▶ The 5 Best Energy Stocks for 2017   [Oct-30-17 10:02AM  Investopedia]
▶ Understanding Falling US Distillate Inventories   [Sep-28-17 02:06PM  Market Realist]
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▶ Comstock Resources, Inc. Announces Management Changes   [Sep-01-17 06:46AM  GlobeNewswire]
Financial statements of CRK
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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