Comstock Resources, Inc. (CRK Quick QuoteCRK - Free Report) was supposed to be flying high in 2023 on higher natural gas prices. Instead, earnings are expected to fall 50% year-over-year and it's now a Zacks Rank #5 (Strong Sell).

Comstock Resources is a leading independent natural gas producer with operations focused on the development of the Haynesville Shale in North Louisiana and East Texas.

From Boom in 2022 to Bust?

In 2022, with natural gas prices soaring, Comstock generated free cash flow from operations of $673 million, including $129 million in the fourth quarter.

Oil and gas sales, including realized hedged losses, jumped 58% in 2022 to $2.3 billion from 2021.

It also retired $506 million of debt and conversion of preferred stock.

Everything was looking so good, that Comstock resumed its quarterly dividend, which is now $0.125 per share, and is yielding 4.8%.

Earnings Estimates Slashed for 2023

But as natural gas prices have fallen to multi-year lows, the analysts have slashed their full year estimates.

The 2023 Zacks Consensus Estimate has fallen to $1.86 from $4.60 in the last 90 days, with one analyst even cutting in the last 7 days. That $1.86 is a 50.1% decline from 2022, when Comstock made $3.73.

Here's what it looks like on the chart.

Image Source: Zacks Investment Research

A Buying Opportunity?

Shares of Comstock are down 21.3% year-to-date. It's cheap, with a forward P/E of 5.6.

But until natural gas prices rebound off of 2023 lows, most investors will probably stay away from the natural gas stocks. That presents a buying opportunity for those who believe that natural gas will soon bottom.

Remember, the Zacks Rank is a short term recommendation of 1 to 3 months. When natural gas finally turns around, the estimates likely will too.

Investors interested in playing the rebound should probably keep Comstock on their watch list.