NEW YORK ( TheStreet) -- Comstock Resources (NYSE: CRK) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and a generally disappointing performance in the stock itself. Highlights from the ratings report include:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 204.6% when compared to the same quarter one year ago, falling from -$6.77 million to -$20.61 million.
- The share price of COMSTOCK RESOURCES INC has not done very well: it is down 18.61% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The revenue fell significantly faster than the industry average of 11.9%. Since the same quarter one year prior, revenues fell by 19.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- COMSTOCK RESOURCES INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, COMSTOCK RESOURCES INC continued to lose money by earning -$0.43 versus -$0.81 in the prior year. This year, the market expects an improvement in earnings ($0.04 versus -$0.43).
- Net operating cash flow has slightly increased to $62.43 million or 6.88% when compared to the same quarter last year. In addition, COMSTOCK RESOURCES INC has also modestly surpassed the industry average cash flow growth rate of 0.79%.