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Comstock (CRK) Headed for Strong Q2 Earnings: Know Why

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Comstock Resources, Inc. (CRK - Free Report) is set to release second-quarter results on Aug 1. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 93 cents per unit on revenues of $669.3 million.

Let’s delve into the factors that might have influenced the independent natural gas producer’s performance in the June quarter. But it’s worth taking a look at Comstock’s previous-quarter performance first.

Highlights of Q1 Earnings & Surprise History

In the last-reported quarter, this Frisco, TX-based upstream player had reported adjusted net income per share of 51 cents, meeting the Zacks Consensus Estimate. Revenues of $524.8 million beat the Zacks Consensus Estimate by 22%.

CRK delivered a four-quarter average earnings surprise of 3.7%. This is depicted in the graph below:
 

Comstock Resources, Inc. Price and EPS Surprise

Comstock Resources, Inc. Price and EPS Surprise

Comstock Resources, Inc. price-eps-surprise | Comstock Resources, Inc. Quote

 

Trend in Estimate Revision

The Zacks Consensus Estimate for the second-quarter bottom line has been revised 8.1% upward in the past seven days. The estimated figure indicates a 322.7% jump year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 94.8% increase from the year-ago period.

Factors to Consider

Comstock Resources is expected to have benefited from the surge in natural gas realizations. As a reflection of this price boost, the Zacks Consensus Estimate for the second-quarter average realized price for the commodity is pegged at $6.58 per thousand cubic feet, up significantly from a year earlier when the company had fetched $2.46. The year-over-year surge in realizations has most likely buoyed revenues and cash flows of CRK, which produces almost 100% natural gas.

One of the largest operators in the Haynesville shale has also done a fairly admirable job at increasing production. A low-cost provider, the company’s leadership position in Haynesville provides it access to the Gulf Coast and attractive pricing advantage. Comstock’s 1,900+ high-return net drilling locations support its development program. Echoing Comstock’s healthy production dynamics, the Zacks Consensus Estimate for the to-be-reported quarter’s total volume stands at 122,100 thousand cubic feet equivalent, implying a 6.1% increase from the previous quarter.

Why a Likely Positive Surprise?

Our proven model predicts an earnings beat for Comstock this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

CRK has an Earnings ESP of +5.45% and a Zacks Rank #3.

Other Stocks to Consider

Comstock is not the only energy company looking up this earnings cycle. Here are some other firms from the space that you may want to consider on the basis of our model:

Delek US Holdings, Inc. (DK - Free Report) has an Earnings ESP of +4.43% and a Zacks Rank #1. The firm is scheduled to release earnings on Aug 4.

You can see the complete list of today’s Zacks #1 Rank stocks here.

For 2022, Delek US Holdings has a projected earnings growth rate of 353.5%. Valued at around $2.2 billion, DK has gained around 40.3% in a year.

Cactus, Inc. (WHD - Free Report) has an Earnings ESP of +3.74% and a Zacks Rank #2. The firm is scheduled to release earnings on Aug 4.

Cactus topped the Zacks Consensus Estimate by an average of 4.3% in the trailing four quarters, including a 3.5% beat in Q1. WHD has edged up some 2.5% in a year.

ConocoPhillips (COP - Free Report) has an Earnings ESP of +1.21% and a Zacks Rank #3. The firm is scheduled to release earnings on Aug 4.

For 2022, ConocoPhillips has a projected earnings growth rate of 143.6%. Valued at around $117.8 billion, COP has gained around 61.7% in a year.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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