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Surging Earnings Estimates Signal Upside for Comstock (CRK) Stock

Comstock (CRK) shares have started gaining and might continue moving higher in the near term, as indicated by solid earnings estimate revisions.

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This story originally appeared on Zacks

Comstock Resources (CRK) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company.

- Zacks

Analysts' growing optimism on the earnings prospects of this oil and gas company is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- is principally built on this insight.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

Consensus earnings estimates for the next quarter and full year have moved considerably higher for Comstock, as there has been strong agreement among the covering analysts in raising estimates.

The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:

12 Month EPS

Current-Quarter Estimate Revisions

The earnings estimate of $0.36 per share for the current quarter represents a change of +700% from the number reported a year ago.

Over the last 30 days, two estimates have moved higher for Comstock compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 25.32%.

Current-Year Estimate Revisions

For the full year, the company is expected to earn $1.22 per share, representing a year-over-year change of +430.43%.

There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, three estimates have moved up for Comstock versus no negative revisions. This has pushed the consensus estimate 10.91% higher.

Favorable Zacks Rank

The promising estimate revisions have helped Comstock earn a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

Comstock shares have added 17.1% over the past four weeks, suggesting that investors are betting on its impressive estimate revisions. So, you may consider adding it to your portfolio right away to benefit from its earnings growth prospects.



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Comstock Resources, Inc. (CRK): Free Stock Analysis Report

 

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