Intrinsic value of Comstock Resources - CRK

Previous Close

$6.21

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

  Value-price divergence*

-208%

Previous close

$6.21

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

 
Value-price divergence*

-208%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

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
  50.00
  45.50
  41.45
  37.81
  34.52
  31.57
  28.91
  26.52
  24.37
  22.43
  20.69
  19.12
  17.71
  16.44
  15.29
  14.27
  13.34
  12.50
  11.75
  11.08
  10.47
  9.92
  9.43
  8.99
  8.59
  8.23
  7.91
  7.62
  7.36
  7.12
Revenue, $m
  176
  264
  384
  543
  749
  1,007
  1,325
  1,708
  2,162
  2,688
  3,292
  3,973
  4,732
  5,570
  6,486
  7,478
  8,545
  9,684
  10,895
  12,176
  13,525
  14,941
  16,424
  17,973
  19,588
  21,271
  23,021
  24,842
  26,734
  28,700
  30,744
Variable operating expenses, $m
 
  1,403
  2,041
  2,887
  3,978
  5,352
  7,041
  9,077
  11,485
  14,283
  17,488
  21,106
  25,142
  29,594
  34,459
  39,730
  45,397
  51,452
  57,886
  64,690
  71,857
  79,381
  87,259
  95,489
  104,072
  113,011
  122,313
  131,984
  142,037
  152,484
  163,340
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
  1,403
  2,041
  2,887
  3,978
  5,352
  7,041
  9,077
  11,485
  14,283
  17,488
  21,106
  25,142
  29,594
  34,459
  39,730
  45,397
  51,452
  57,886
  64,690
  71,857
  79,381
  87,259
  95,489
  104,072
  113,011
  122,313
  131,984
  142,037
  152,484
  163,340
Operating income, $m
  5
  -1,139
  -1,657
  -2,343
  -3,229
  -4,344
  -5,716
  -7,369
  -9,323
  -11,595
  -14,196
  -17,134
  -20,410
  -24,024
  -27,973
  -32,252
  -36,852
  -41,768
  -46,991
  -52,515
  -58,333
  -64,440
  -70,835
  -77,516
  -84,484
  -91,740
  -99,291
  -107,143
  -115,303
  -123,784
  -132,597
EBITDA, $m
  146
  -1,001
  -1,456
  -2,060
  -2,838
  -3,818
  -5,024
  -6,476
  -8,194
  -10,191
  -12,477
  -15,059
  -17,939
  -21,115
  -24,586
  -28,347
  -32,391
  -36,711
  -41,302
  -46,156
  -51,270
  -56,638
  -62,259
  -68,131
  -74,255
  -80,633
  -87,269
  -94,170
  -101,343
  -108,797
  -116,543
Interest expense (income), $m
  105
  96
  100
  150
  217
  302
  411
  544
  704
  893
  1,114
  1,366
  1,651
  1,968
  2,319
  2,702
  3,116
  3,562
  4,039
  4,546
  5,081
  5,645
  6,237
  6,857
  7,505
  8,181
  8,884
  9,616
  10,378
  11,169
  11,991
Earnings before tax, $m
  -128
  -1,235
  -1,756
  -2,493
  -3,446
  -4,647
  -6,126
  -7,912
  -10,027
  -12,488
  -15,310
  -18,499
  -22,060
  -25,992
  -30,292
  -34,953
  -39,969
  -45,331
  -51,030
  -57,060
  -63,414
  -70,086
  -77,073
  -84,374
  -91,989
  -99,921
  -108,175
  -116,759
  -125,681
  -134,953
  -144,588
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
  -1,235
  -1,756
  -2,493
  -3,446
  -4,647
  -6,126
  -7,912
  -10,027
  -12,488
  -15,310
  -18,499
  -22,060
  -25,992
  -30,292
  -34,953
  -39,969
  -45,331
  -51,030
  -57,060
  -63,414
  -70,086
  -77,073
  -84,374
  -91,989
  -99,921
  -108,175
  -116,759
  -125,681
  -134,953
  -144,588

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
  1,333
  1,940
  2,744
  3,782
  5,087
  6,693
  8,629
  10,917
  13,578
  16,624
  20,063
  23,900
  28,132
  32,757
  37,767
  43,154
  48,910
  55,026
  61,494
  68,307
  75,460
  82,948
  90,771
  98,930
  107,428
  116,270
  125,464
  135,020
  144,951
  155,270
Adjusted assets (=assets-cash), $m
  824
  1,333
  1,940
  2,744
  3,782
  5,087
  6,693
  8,629
  10,917
  13,578
  16,624
  20,063
  23,900
  28,132
  32,757
  37,767
  43,154
  48,910
  55,026
  61,494
  68,307
  75,460
  82,948
  90,771
  98,930
  107,428
  116,270
  125,464
  135,020
  144,951
  155,270
Revenue / Adjusted assets
  0.214
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
Average production assets, $m
  919
  1,379
  2,006
  2,837
  3,910
  5,260
  6,920
  8,922
  11,288
  14,039
  17,188
  20,745
  24,711
  29,087
  33,869
  39,049
  44,619
  50,571
  56,895
  63,582
  70,627
  78,022
  85,765
  93,853
  102,289
  111,075
  120,218
  129,724
  139,604
  149,872
  160,543
Working capital, $m
  -2
  -26
  -38
  -54
  -75
  -101
  -133
  -171
  -216
  -269
  -329
  -397
  -473
  -557
  -649
  -748
  -854
  -968
  -1,090
  -1,218
  -1,352
  -1,494
  -1,642
  -1,797
  -1,959
  -2,127
  -2,302
  -2,484
  -2,673
  -2,870
  -3,074
Total debt, $m
  1,045
  1,084
  1,630
  2,354
  3,287
  4,462
  5,908
  7,650
  9,709
  12,104
  14,845
  17,941
  21,394
  25,203
  29,365
  33,874
  38,723
  43,903
  49,408
  55,229
  61,360
  67,798
  74,537
  81,578
  88,921
  96,569
  104,527
  112,801
  121,402
  130,339
  139,627
Total liabilities, $m
  1,161
  1,200
  1,746
  2,470
  3,403
  4,578
  6,024
  7,766
  9,825
  12,220
  14,961
  18,057
  21,510
  25,319
  29,481
  33,990
  38,839
  44,019
  49,524
  55,345
  61,476
  67,914
  74,653
  81,694
  89,037
  96,685
  104,643
  112,917
  121,518
  130,455
  139,743
Total equity, $m
  -271
  133
  194
  274
  378
  509
  669
  863
  1,092
  1,358
  1,662
  2,006
  2,390
  2,813
  3,276
  3,777
  4,315
  4,891
  5,503
  6,149
  6,831
  7,546
  8,295
  9,077
  9,893
  10,743
  11,627
  12,546
  13,502
  14,495
  15,527
Total liabilities and equity, $m
  890
  1,333
  1,940
  2,744
  3,781
  5,087
  6,693
  8,629
  10,917
  13,578
  16,623
  20,063
  23,900
  28,132
  32,757
  37,767
  43,154
  48,910
  55,027
  61,494
  68,307
  75,460
  82,948
  90,771
  98,930
  107,428
  116,270
  125,463
  135,020
  144,950
  155,270
Debt-to-equity ratio
  -3.856
  8.130
  8.400
  8.580
  8.690
  8.770
  8.830
  8.870
  8.890
  8.910
  8.930
  8.940
  8.950
  8.960
  8.960
  8.970
  8.970
  8.980
  8.980
  8.980
  8.980
  8.980
  8.990
  8.990
  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
  -1,235
  -1,756
  -2,493
  -3,446
  -4,647
  -6,126
  -7,912
  -10,027
  -12,488
  -15,310
  -18,499
  -22,060
  -25,992
  -30,292
  -34,953
  -39,969
  -45,331
  -51,030
  -57,060
  -63,414
  -70,086
  -77,073
  -84,374
  -91,989
  -99,921
  -108,175
  -116,759
  -125,681
  -134,953
  -144,588
Depreciation, amort., depletion, $m
  141
  138
  201
  284
  391
  526
  692
  892
  1,129
  1,404
  1,719
  2,074
  2,471
  2,909
  3,387
  3,905
  4,462
  5,057
  5,689
  6,358
  7,063
  7,802
  8,576
  9,385
  10,229
  11,108
  12,022
  12,972
  13,960
  14,987
  16,054
Funds from operations, $m
  -40
  -1,097
  -1,556
  -2,210
  -3,055
  -4,121
  -5,434
  -7,020
  -8,898
  -11,084
  -13,591
  -16,425
  -19,589
  -23,084
  -26,905
  -31,048
  -35,507
  -40,273
  -45,341
  -50,702
  -56,351
  -62,283
  -68,496
  -74,988
  -81,760
  -88,814
  -96,154
  -103,787
  -111,721
  -119,966
  -128,534
Change in working capital, $m
  -16
  -9
  -12
  -16
  -21
  -26
  -32
  -38
  -45
  -53
  -60
  -68
  -76
  -84
  -92
  -99
  -107
  -114
  -121
  -128
  -135
  -142
  -148
  -155
  -162
  -168
  -175
  -182
  -189
  -197
  -204
Cash from operations, $m
  -24
  -1,088
  -1,544
  -2,194
  -3,034
  -4,095
  -5,403
  -6,982
  -8,853
  -11,032
  -13,531
  -16,357
  -19,513
  -23,000
  -26,814
  -30,949
  -35,400
  -40,159
  -45,220
  -50,574
  -56,216
  -62,142
  -68,348
  -74,833
  -81,598
  -88,645
  -95,979
  -103,605
  -111,531
  -119,769
  -128,329
Maintenance CAPEX, $m
  0
  -92
  -138
  -201
  -284
  -391
  -526
  -692
  -892
  -1,129
  -1,404
  -1,719
  -2,074
  -2,471
  -2,909
  -3,387
  -3,905
  -4,462
  -5,057
  -5,689
  -6,358
  -7,063
  -7,802
  -8,576
  -9,385
  -10,229
  -11,108
  -12,022
  -12,972
  -13,960
  -14,987
New CAPEX, $m
  -57
  -460
  -627
  -831
  -1,073
  -1,350
  -1,661
  -2,001
  -2,366
  -2,751
  -3,149
  -3,556
  -3,967
  -4,376
  -4,782
  -5,180
  -5,570
  -5,952
  -6,324
  -6,688
  -7,044
  -7,395
  -7,743
  -8,089
  -8,436
  -8,786
  -9,142
  -9,506
  -9,881
  -10,268
  -10,670
Cash from investing activities, $m
  -30
  -552
  -765
  -1,032
  -1,357
  -1,741
  -2,187
  -2,693
  -3,258
  -3,880
  -4,553
  -5,275
  -6,041
  -6,847
  -7,691
  -8,567
  -9,475
  -10,414
  -11,381
  -12,377
  -13,402
  -14,458
  -15,545
  -16,665
  -17,821
  -19,015
  -20,250
  -21,528
  -22,853
  -24,228
  -25,657
Free cash flow, $m
  -54
  -1,640
  -2,309
  -3,226
  -4,391
  -5,836
  -7,589
  -9,675
  -12,111
  -14,911
  -18,084
  -21,632
  -25,554
  -29,847
  -34,504
  -39,516
  -44,876
  -50,573
  -56,600
  -62,951
  -69,618
  -76,600
  -83,893
  -91,499
  -99,420
  -107,660
  -116,228
  -125,133
  -134,385
  -143,998
  -153,987
Issuance/(repayment) of debt, $m
  -3
  39
  546
  724
  934
  1,175
  1,445
  1,742
  2,060
  2,395
  2,741
  3,096
  3,453
  3,809
  4,162
  4,509
  4,849
  5,181
  5,504
  5,821
  6,132
  6,437
  6,740
  7,041
  7,343
  7,648
  7,958
  8,275
  8,601
  8,938
  9,288
Issuance/(repurchase) of shares, $m
  0
  1,639
  1,817
  2,574
  3,550
  4,777
  6,287
  8,106
  10,256
  12,754
  15,614
  18,843
  22,444
  26,416
  30,754
  35,454
  40,508
  45,906
  51,642
  57,707
  64,095
  70,801
  77,822
  85,156
  92,805
  100,771
  109,060
  117,678
  126,637
  135,946
  145,620
Cash from financing (excl. dividends), $m  
  -15
  1,678
  2,363
  3,298
  4,484
  5,952
  7,732
  9,848
  12,316
  15,149
  18,355
  21,939
  25,897
  30,225
  34,916
  39,963
  45,357
  51,087
  57,146
  63,528
  70,227
  77,238
  84,562
  92,197
  100,148
  108,419
  117,018
  125,953
  135,238
  144,884
  154,908
Total cash flow (excl. dividends), $m
  -68
  38
  54
  72
  93
  117
  143
  173
  204
  237
  272
  307
  342
  378
  413
  447
  481
  514
  546
  577
  608
  638
  668
  698
  728
  758
  789
  820
  853
  886
  921
Retained Cash Flow (-), $m
  100
  -1,639
  -1,817
  -2,574
  -3,550
  -4,777
  -6,287
  -8,106
  -10,256
  -12,754
  -15,614
  -18,843
  -22,444
  -26,416
  -30,754
  -35,454
  -40,508
  -45,906
  -51,642
  -57,707
  -64,095
  -70,801
  -77,822
  -85,156
  -92,805
  -100,771
  -109,060
  -117,678
  -126,637
  -135,946
  -145,620
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
 
  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
 
  -1,601
  -1,763
  -2,502
  -3,457
  -4,661
  -6,144
  -7,933
  -10,051
  -12,517
  -15,343
  -18,536
  -22,102
  -26,038
  -30,342
  -35,007
  -40,027
  -45,393
  -51,096
  -57,130
  -63,487
  -70,163
  -77,153
  -84,458
  -92,077
  -100,013
  -108,271
  -116,858
  -125,784
  -135,060
  -144,699
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
 
  -1,379
  -1,290
  -1,533
  -1,745
  -1,907
  -2,002
  -2,021
  -1,962
  -1,834
  -1,651
  -1,430
  -1,193
  -959
  -741
  -552
  -395
  -271
  -179
  -113
  -69
  -40
  -22
  -12
  -6
  -3
  -1
  -1
  0
  0
  0
Current shareholders' claim on cash, %
  100
  50.0
  3.4
  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., an independent energy company, acquires, develops, explores, and produces oil and natural gas properties in the United States. Its oil and gas operations are primarily located in East Texas/North Louisiana and South Texas. The company owns interests in 1,575 producing oil and natural gas wells. As of December 31, 2015, it had proved reserves of 625 billion cubic feet of natural gas equivalent. The company was founded in 1919 and is headquartered in Frisco, Texas.

FINANCIAL RATIOS  of  Comstock Resources (CRK)

Valuation Ratios
P/E Ratio -0.6
Price to Sales 0.5
Price to Book -0.3
Price to Tangible Book
Price to Cash Flow -3.6
Price to Free Cash Flow -1.1
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 50% 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 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 -10%. 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 15.178 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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EPE EP Energy Cl A 3.15 0.62  str.sell

COMPANY NEWS

▶ 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]
▶ The 5 Best Energy Stocks for 2017   [06:00AM  Investopedia]
▶ 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]
▶ Comstock Resources Stock Is Forming a Base   [10:57AM  at Investopedia]
▶ Comstock Acquires New Acreage in Joint Venture   [Jan-12-17 05:42PM  at Investopedia]
▶ Comstock Resources Maintains Upward Trend (CRK)   [Dec-05-16 07:03PM  at Investopedia]
▶ A Comstock Pullback May Be a Good Sign (CRK)   [Dec-02-16 10:47AM  at Investopedia]
▶ Comstock Stock Pattern Contradicts Analysts (CRK)   [Nov-26-16 07:55AM  at Investopedia]
▶ Comstock Is Preparing for a Breakout (CRK)   [Nov-22-16 11:18AM  at Investopedia]
Stock chart of CRK 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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