Comstock Resources, Inc. (CRK): A Bull Case Theory

We came across a bullish thesis on Comstock Resources, Inc. (CRK) on Deep Value Capital’s Substack. In this article, we will summarize the bulls’ thesis on CRK. Comstock Resources, Inc. (CRK)'s share was trading at $23.94 as of 11^th June. CRK’s trailing and forward P/E were 48.73 and 34.84 respectively according to Yahoo Finance.

Comstock Resources (CRK), a pure-play natural gas producer based in Texas, is quietly positioned at the heart of a transformative energy shift. As demand for natural gas surges—driven by data center expansion, rising LNG exports, and increasingly power-hungry infrastructure—Comstock stands out as America’s lowest-cost gas producer, with strategic operations in the high-output Haynesville shale basin.

The company operates over 2,400 wells across more than 820,000 net acres and produces approximately 1,350 MMcf/day of dry gas. Comstock’s recent expansion into the deeper, more productive Western Haynesville zone further strengthens its long-term production profile. What differentiates Comstock is its disciplined, singular focus on low-cost gas extraction, without the distraction of midstream or refining assets.

Led by Jay Allison since 1988, the company has refined its cost efficiency into a durable competitive advantage—staying profitable at low prices, thriving in upcycles, and avoiding overreliance on hedging.

Natural gas prices have already rebounded sharply from a February 2024 bottom, and the setup through 2027 appears exceptionally favorable. With a lean cost structure and proximity to LNG terminals, Comstock is well-placed to capitalize on this multi-year demand tailwind.

The market, however, has yet to fully reflect this potential, offering a compelling valuation case. Even after its recent run, the stock could double by 2027, implying a ~31% CAGR. If gas prices continue to strengthen, Comstock's pure-play model and operational leverage could trigger a major revaluation. In short, CRK is a high-conviction bet on the future of natural gas, built for both resilience and upside.

Recently, we covered a bullish thesis on Advance Auto Parts (AAP) by the same author, which framed the stock as a classic turnaround opportunity under new CEO Shane O’Kelly. The thesis emphasized margin recovery, a pivot toward higher-margin professional customers, and potential for a 176% share price appreciation by 2027. A parallel case on Comstock Resources (CRK) similarly focuses on operational discipline and a favorable macro setup—this time in natural gas. Both AAP and CRK are framed as deep value opportunities, relying on strategic execution and macro tailwinds to drive significant rerating over a multi-year horizon.

Comstock Resources, Inc. (CRK) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held CRK at the end of the first quarter which was 18 in the previous quarter. While we acknowledge the risk and potential of CRK as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.