Intrinsic value of Comstock Resources - CRK

Previous Close

$7.56

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$7.56

 
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

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 0.1

 

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
  48.80
  44.42
  40.48
  36.93
  33.74
  30.86
  28.28
  25.95
  23.85
  21.97
  20.27
  18.74
  17.37
  16.13
  15.02
  14.02
  13.12
  12.30
  11.57
  10.92
  10.33
  9.79
  9.31
  8.88
  8.49
  8.14
  7.83
  7.55
  7.29
  7.06
Revenue, $m
  176
  262
  378
  531
  728
  973
  1,273
  1,633
  2,057
  2,548
  3,108
  3,738
  4,438
  5,209
  6,050
  6,958
  7,934
  8,974
  10,078
  11,245
  12,472
  13,760
  15,108
  16,515
  17,982
  19,509
  21,098
  22,750
  24,467
  26,251
  28,105
Variable operating expenses, $m
 
  1,391
  2,009
  2,823
  3,865
  5,169
  6,765
  8,678
  10,930
  13,537
  16,511
  19,858
  23,580
  27,676
  32,141
  36,969
  42,151
  47,680
  53,547
  59,744
  66,266
  73,108
  80,268
  87,743
  95,536
  103,651
  112,093
  120,870
  129,992
  139,471
  149,322
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
  1,391
  2,009
  2,823
  3,865
  5,169
  6,765
  8,678
  10,930
  13,537
  16,511
  19,858
  23,580
  27,676
  32,141
  36,969
  42,151
  47,680
  53,547
  59,744
  66,266
  73,108
  80,268
  87,743
  95,536
  103,651
  112,093
  120,870
  129,992
  139,471
  149,322
Operating income, $m
  5
  -1,130
  -1,631
  -2,292
  -3,138
  -4,196
  -5,492
  -7,044
  -8,872
  -10,989
  -13,403
  -16,120
  -19,142
  -22,467
  -26,092
  -30,011
  -34,218
  -38,706
  -43,468
  -48,499
  -53,794
  -59,348
  -65,160
  -71,228
  -77,555
  -84,142
  -90,995
  -98,120
  -105,525
  -113,220
  -121,217
EBITDA, $m
  146
  -919
  -1,327
  -1,865
  -2,553
  -3,415
  -4,469
  -5,732
  -7,220
  -8,942
  -10,907
  -13,118
  -15,576
  -18,282
  -21,232
  -24,421
  -27,844
  -31,496
  -35,371
  -39,465
  -43,774
  -48,293
  -53,022
  -57,961
  -63,109
  -68,469
  -74,045
  -79,843
  -85,869
  -92,131
  -98,638
Interest expense (income), $m
  105
  96
  91
  136
  195
  271
  366
  482
  621
  785
  975
  1,192
  1,435
  1,707
  2,005
  2,330
  2,682
  3,059
  3,462
  3,889
  4,340
  4,815
  5,313
  5,835
  6,379
  6,947
  7,538
  8,152
  8,792
  9,456
  10,146
Earnings before tax, $m
  -128
  -1,226
  -1,722
  -2,427
  -3,333
  -4,467
  -5,857
  -7,526
  -9,494
  -11,774
  -14,378
  -17,312
  -20,577
  -24,174
  -28,097
  -32,341
  -36,899
  -41,765
  -46,930
  -52,388
  -58,134
  -64,163
  -70,473
  -77,063
  -83,934
  -91,089
  -98,533
  -106,272
  -114,317
  -122,676
  -131,363
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
  -1,226
  -1,722
  -2,427
  -3,333
  -4,467
  -5,857
  -7,526
  -9,494
  -11,774
  -14,378
  -17,312
  -20,577
  -24,174
  -28,097
  -32,341
  -36,899
  -41,765
  -46,930
  -52,388
  -58,134
  -64,163
  -70,473
  -77,063
  -83,934
  -91,089
  -98,533
  -106,272
  -114,317
  -122,676
  -131,363

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
  1,224
  1,767
  2,483
  3,400
  4,547
  5,950
  7,632
  9,613
  11,906
  14,522
  17,465
  20,739
  24,342
  28,269
  32,515
  37,073
  41,935
  47,095
  52,546
  58,283
  64,300
  70,597
  77,172
  84,026
  91,163
  98,588
  106,307
  114,330
  122,668
  131,332
Adjusted assets (=assets-cash), $m
  824
  1,224
  1,767
  2,483
  3,400
  4,547
  5,950
  7,632
  9,613
  11,906
  14,522
  17,465
  20,739
  24,342
  28,269
  32,515
  37,073
  41,935
  47,095
  52,546
  58,283
  64,300
  70,597
  77,172
  84,026
  91,163
  98,588
  106,307
  114,330
  122,668
  131,332
Revenue / Adjusted assets
  0.214
  0.214
  0.214
  0.214
  0.214
  0.214
  0.214
  0.214
  0.214
  0.214
  0.214
  0.214
  0.214
  0.214
  0.214
  0.214
  0.214
  0.214
  0.214
  0.214
  0.214
  0.214
  0.214
  0.214
  0.214
  0.214
  0.214
  0.214
  0.214
  0.214
  0.214
Average production assets, $m
  919
  1,368
  1,975
  2,775
  3,799
  5,081
  6,649
  8,529
  10,742
  13,305
  16,228
  19,518
  23,176
  27,202
  31,591
  36,336
  41,429
  46,863
  52,630
  58,721
  65,131
  71,856
  78,893
  86,240
  93,900
  101,876
  110,173
  118,799
  127,765
  137,082
  146,764
Working capital, $m
  -2
  -101
  -146
  -205
  -281
  -376
  -491
  -630
  -794
  -983
  -1,200
  -1,443
  -1,713
  -2,011
  -2,335
  -2,686
  -3,062
  -3,464
  -3,890
  -4,341
  -4,814
  -5,311
  -5,832
  -6,375
  -6,941
  -7,530
  -8,144
  -8,781
  -9,444
  -10,133
  -10,849
Total debt, $m
  1,045
  985
  1,475
  2,118
  2,944
  3,976
  5,239
  6,753
  8,536
  10,599
  12,953
  15,603
  18,549
  21,792
  25,326
  29,147
  33,250
  37,626
  42,270
  47,176
  52,338
  57,754
  63,421
  69,339
  75,508
  81,931
  88,613
  95,561
  102,781
  110,285
  118,083
Total liabilities, $m
  1,161
  1,101
  1,591
  2,234
  3,060
  4,092
  5,355
  6,869
  8,652
  10,715
  13,069
  15,719
  18,665
  21,908
  25,442
  29,263
  33,366
  37,742
  42,386
  47,292
  52,454
  57,870
  63,537
  69,455
  75,624
  82,047
  88,729
  95,677
  102,897
  110,401
  118,199
Total equity, $m
  -271
  122
  177
  248
  340
  455
  595
  763
  961
  1,191
  1,452
  1,747
  2,074
  2,434
  2,827
  3,251
  3,707
  4,194
  4,710
  5,255
  5,828
  6,430
  7,060
  7,717
  8,403
  9,116
  9,859
  10,631
  11,433
  12,267
  13,133
Total liabilities and equity, $m
  890
  1,223
  1,768
  2,482
  3,400
  4,547
  5,950
  7,632
  9,613
  11,906
  14,521
  17,466
  20,739
  24,342
  28,269
  32,514
  37,073
  41,936
  47,096
  52,547
  58,282
  64,300
  70,597
  77,172
  84,027
  91,163
  98,588
  106,308
  114,330
  122,668
  131,332
Debt-to-equity ratio
  -3.856
  8.050
  8.340
  8.530
  8.660
  8.740
  8.810
  8.850
  8.880
  8.900
  8.920
  8.930
  8.940
  8.950
  8.960
  8.960
  8.970
  8.970
  8.980
  8.980
  8.980
  8.980
  8.980
  8.980
  8.990
  8.990
  8.990
  8.990
  8.990
  8.990
  8.990
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
  -1,226
  -1,722
  -2,427
  -3,333
  -4,467
  -5,857
  -7,526
  -9,494
  -11,774
  -14,378
  -17,312
  -20,577
  -24,174
  -28,097
  -32,341
  -36,899
  -41,765
  -46,930
  -52,388
  -58,134
  -64,163
  -70,473
  -77,063
  -83,934
  -91,089
  -98,533
  -106,272
  -114,317
  -122,676
  -131,363
Depreciation, amort., depletion, $m
  141
  210
  304
  427
  584
  782
  1,023
  1,312
  1,653
  2,047
  2,497
  3,003
  3,566
  4,185
  4,860
  5,590
  6,374
  7,210
  8,097
  9,034
  10,020
  11,055
  12,137
  13,268
  14,446
  15,673
  16,950
  18,277
  19,656
  21,090
  22,579
Funds from operations, $m
  -40
  -1,015
  -1,418
  -2,000
  -2,748
  -3,686
  -4,834
  -6,214
  -7,841
  -9,727
  -11,882
  -14,309
  -17,012
  -19,989
  -23,236
  -26,751
  -30,525
  -34,555
  -38,833
  -43,354
  -48,114
  -53,108
  -58,336
  -63,795
  -69,488
  -75,416
  -81,583
  -87,995
  -94,660
  -101,586
  -108,784
Change in working capital, $m
  -16
  -33
  -45
  -59
  -76
  -95
  -116
  -139
  -164
  -189
  -216
  -243
  -270
  -298
  -324
  -351
  -377
  -402
  -426
  -450
  -474
  -497
  -520
  -543
  -566
  -590
  -613
  -638
  -663
  -689
  -716
Cash from operations, $m
  -24
  -982
  -1,373
  -1,941
  -2,673
  -3,591
  -4,719
  -6,075
  -7,677
  -9,538
  -11,666
  -14,066
  -16,741
  -19,691
  -22,912
  -26,400
  -30,149
  -34,153
  -38,407
  -42,904
  -47,640
  -52,611
  -57,816
  -63,252
  -68,922
  -74,826
  -80,970
  -87,358
  -93,998
  -100,898
  -108,068
Maintenance CAPEX, $m
  0
  -141
  -210
  -304
  -427
  -584
  -782
  -1,023
  -1,312
  -1,653
  -2,047
  -2,497
  -3,003
  -3,566
  -4,185
  -4,860
  -5,590
  -6,374
  -7,210
  -8,097
  -9,034
  -10,020
  -11,055
  -12,137
  -13,268
  -14,446
  -15,673
  -16,950
  -18,277
  -19,656
  -21,090
New CAPEX, $m
  -57
  -449
  -607
  -799
  -1,025
  -1,282
  -1,568
  -1,880
  -2,213
  -2,563
  -2,923
  -3,290
  -3,659
  -4,026
  -4,389
  -4,745
  -5,094
  -5,434
  -5,766
  -6,091
  -6,410
  -6,725
  -7,037
  -7,348
  -7,660
  -7,976
  -8,297
  -8,626
  -8,966
  -9,317
  -9,682
Cash from investing activities, $m
  -30
  -590
  -817
  -1,103
  -1,452
  -1,866
  -2,350
  -2,903
  -3,525
  -4,216
  -4,970
  -5,787
  -6,662
  -7,592
  -8,574
  -9,605
  -10,684
  -11,808
  -12,976
  -14,188
  -15,444
  -16,745
  -18,092
  -19,485
  -20,928
  -22,422
  -23,970
  -25,576
  -27,243
  -28,973
  -30,772
Free cash flow, $m
  -54
  -1,572
  -2,191
  -3,045
  -4,124
  -5,457
  -7,068
  -8,978
  -11,203
  -13,753
  -16,636
  -19,852
  -23,403
  -27,282
  -31,486
  -36,005
  -40,833
  -45,961
  -51,383
  -57,092
  -63,084
  -69,356
  -75,907
  -82,737
  -89,849
  -97,248
  -104,940
  -112,934
  -121,240
  -129,871
  -138,840
Issuance/(repayment) of debt, $m
  -3
  -60
  489
  644
  825
  1,032
  1,263
  1,514
  1,782
  2,064
  2,354
  2,649
  2,946
  3,242
  3,534
  3,821
  4,102
  4,376
  4,644
  4,906
  5,163
  5,416
  5,667
  5,917
  6,169
  6,423
  6,682
  6,947
  7,221
  7,504
  7,798
Issuance/(repurchase) of shares, $m
  0
  1,685
  1,776
  2,499
  3,424
  4,582
  5,998
  7,695
  9,692
  12,004
  14,640
  17,606
  20,905
  24,534
  28,489
  32,765
  37,355
  42,251
  47,446
  52,933
  58,708
  64,765
  71,103
  77,721
  84,619
  91,803
  99,275
  107,044
  115,119
  123,510
  132,229
Cash from financing (excl. dividends), $m  
  -15
  1,625
  2,265
  3,143
  4,249
  5,614
  7,261
  9,209
  11,474
  14,068
  16,994
  20,255
  23,851
  27,776
  32,023
  36,586
  41,457
  46,627
  52,090
  57,839
  63,871
  70,181
  76,770
  83,638
  90,788
  98,226
  105,957
  113,991
  122,340
  131,014
  140,027
Total cash flow (excl. dividends), $m
  -68
  53
  74
  98
  126
  157
  192
  231
  271
  314
  358
  403
  449
  494
  538
  582
  625
  666
  707
  747
  786
  825
  863
  901
  939
  978
  1,017
  1,058
  1,099
  1,142
  1,187
Retained Cash Flow (-), $m
  100
  -1,685
  -1,776
  -2,499
  -3,424
  -4,582
  -5,998
  -7,695
  -9,692
  -12,004
  -14,640
  -17,606
  -20,905
  -24,534
  -28,489
  -32,765
  -37,355
  -42,251
  -47,446
  -52,933
  -58,708
  -64,765
  -71,103
  -77,721
  -84,619
  -91,803
  -99,275
  -107,044
  -115,119
  -123,510
  -132,229
Prev. year cash balance distribution, $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
Cash flow adjustment, $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 available for distribution, $m
 
  -1,566
  -1,702
  -2,401
  -3,299
  -4,425
  -5,805
  -7,464
  -9,420
  -11,689
  -14,281
  -17,203
  -20,456
  -24,040
  -27,951
  -32,184
  -36,730
  -41,585
  -46,739
  -52,186
  -57,922
  -63,940
  -70,240
  -76,820
  -83,680
  -90,825
  -98,258
  -105,987
  -114,020
  -122,367
  -131,042
Discount rate, %
 
  16.10
  16.91
  17.75
  18.64
  19.57
  20.55
  21.58
  22.65
  23.79
  24.98
  26.23
  27.54
  28.91
  30.36
  31.88
  33.47
  35.14
  36.90
  38.75
  40.68
  42.72
  44.85
  47.10
  49.45
  51.92
  54.52
  57.25
  60.11
  63.11
  66.27
PV of cash for distribution, $m
 
  -1,349
  -1,245
  -1,470
  -1,665
  -1,810
  -1,892
  -1,901
  -1,839
  -1,713
  -1,536
  -1,327
  -1,105
  -885
  -683
  -507
  -362
  -249
  -164
  -104
  -63
  -36
  -20
  -11
  -5
  -3
  -1
  -1
  0
  0
  0
Current shareholders' claim on cash, %
  100
  50.0
  3.2
  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
  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 -0.8
Price to Sales 0.6
Price to Book -0.4
Price to Tangible Book
Price to Cash Flow -4.4
Price to Free Cash Flow -1.3
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 $176 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 48.8% 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 16.1%, 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 531.3%.

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 9.2% 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 0%.

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 522.2%.

Life of production assets of 6.5 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 -38.6%. 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 - $-271 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 15.479 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 $0.1 billion.

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COMPANY NEWS

▶ Top 4 Oil Stocks for December 2017   [Dec-08-17 05:25PM  Investopedia]
▶ Comstock reports 3Q loss   [Nov-03-17 03:09PM  Associated Press]
▶ Top 4 Oil Stocks for November 2017   [Nov-02-17 01:45PM  Investopedia]
▶ 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]
▶ Why US Crude Oil Production Rose Last Week   [Sep-14-17 02:10PM  Market Realist]
▶ Comstock Resources, Inc. Announces Management Changes   [Sep-01-17 06:46AM  GlobeNewswire]
▶ Will US Natural Gas Futures Rise in September?   [Aug-28-17 01:06PM  Market Realist]
▶ Will Saudi Arabia Remove Excess Oil from the Market?   [Aug-08-17 09:11AM  Market Realist]
▶ Comstock reports 2Q loss   [Aug-07-17 11:55PM  Associated Press]
▶ Hedge Funds Net Long Positions in US Crude Oil Rose Again   [Jul-25-17 12:36PM  Market Realist]
▶ US Distillate Inventories Rose for the 3rd Time in 5 Weeks   [Jul-13-17 09:20AM  Market Realist]
▶ Analyzing Hedge Funds Net Long Position on US Crude Oil   [Jul-11-17 11:35AM  Market Realist]
▶ US Distillate Inventories Fell for the Second Straight Week   [Jul-07-17 12:36PM  Market Realist]
▶ OPECs Crude Oil Exports: Bullish or Bearish for Traders?   [Jul-05-17 09:53AM  Market Realist]
▶ Analyzing US Gasoline Inventories and Gasoline Demand   [Jun-15-17 11:04AM  Market Realist]
▶ Comstock reports 1Q loss   [May-08-17 07:02AM  Associated Press]
▶ Russias Crude Oil Production Fell in April: Whats Next?   [May-03-17 09:21AM  Market Realist]
▶ Will OPEC Extend the Production Cut Deal into 2018?   [May-02-17 10:03AM  Market Realist]
▶ US Crude Oil Imports and Refinery Demand Impact Inventories   [Apr-06-17 09:36AM  Market Realist]
▶ Will Gasoline Inventories Support Crude Oil Prices?   [Mar-22-17 08:20AM  Market Realist]
▶ Irans Crude Oil Production: Highest in the Last 7 Years   [Mar-21-17 08:56AM  Market Realist]
▶ Comstock Recovers Losses from Previous Day   [Mar-09-17 08:04PM  Investopedia]
▶ How to Read Comstock Resources Stock Price Dip   [Feb-09-17 08:01PM  at Investopedia]
▶ Comstock Resources Breakout Still Intact   [Jan-30-17 05:10PM  at Investopedia]
▶ Top 5 Oil Stocks for 2017   [12:37PM  at Investopedia]
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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