COMSTOCK RESOURCES INC

Where It Passes

Where It Falls Short

• Debt & Leverage8% pass✓ 1✗ 14▾

  11 of 12 flag CRK's debt & leverage — Graham, Buffett, Lynch +8 more

  LT Debt vs Net Current AssetsLT Debt $3.4B vs NCA $-281.6M

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: 1.29, IC: 2.7x

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity1.29

  ✗Lynch< 0.33

  Cash - Long-term Debt$-3.3B

  ✗LynchPositive preferred

  LT Debt / Total Assets Change46.26% -> 40.09%

  ✓PiotroskiDecreased YoY

  Current Assets / Current Liabilities0.60

  ✗Dreman> 1.5✗SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity1.29

  ✗Dreman< 0.8✗Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✗SchlossD/E < 1.00x

  Debt Levels1.29

  ✗MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  Interest Coverage & Debt/EBITDAIC=2.7x, D/EBITDA=2.7x

  ✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity1.29

  ✗Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)-1.2867; #3482/4210 (top 82.7%)

  ✗AsnessTop 30% of eligible cross-section
• Growth13% pass✓ 3✗ 10▾

  7 of 8 flag CRK's growth — Graham, Lynch, Dreman +4 more

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)P/E 10.6x (growth N/A)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR-29.7%

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthN/A (no inventory)

  ✓LynchInventory growth < Revenue growth

  EPS Growth Direction

  ✗DremanPositive over recent years

  EPS CAGR

  ✗Dreman> 5% annualized

  Positive Net Income Frequency6/17 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth-19.9%

  ✗Ackman>= 5%

  Positive EPS Growth Frequency

  ✗AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR-29.7% CAGR over 3 years

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendrevenue up, operating margin 14.5% -> 29.1%

  ✓SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR20.9%

  ✓SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR-29.7% over 3 years

  ✗Neff7%-20% annualized
• Valuation15% pass✓ 9✗ 19▾

  11 of 13 flag CRK's valuation — Graham, Lynch, Greenblatt +8 more

  Net income / market capitalization+9.41%; #736/6340 (top 11.6%)

  ✓AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Price / 3-yr avg EPS31.8x

  ✗Graham<= 15x

  Price-to-Book Ratio1.7x

  ✗Graham<= 1.5x

  P/E x P/B53.70

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)P/E 10.6x (growth N/A)

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value7.7%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=7.7%, ROC=9.0%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS10.6x

  ✓Dreman< 12x✓Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)5.0x

  ✓Dreman< 8x

  Price / Book Value per Share1.7x

  ✗Dreman< 1.2x✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Valuation ReasonablenessP/E=10.6x, OE Yield=-7.0%

  ✓MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldP/E=10.6x, FCF Yield=-10.1%

  ✓PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/E=10.6x, P/B=1.7x

  ✓MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic Value-112.3% (IV=$7.15 vs Price=$15.18)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per ShareN/A (negative FCF)

  ✗Ackman<= 25

  Price vs. Trailing Low121% of trailing low ($12.51)

  ✗Templeton<= 120% of trailing low (certified split-adjusted live window)

  Positive book equity / market capitalization+0.5853; #2555/6449 (top 39.6%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS10.6x

  ✓NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E-2.79

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per Share1.93x

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change+65.2%

  ✓SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+0.4739; #2698/5247 (top 51.4%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization-18.37%; #3485/4519 (top 77.1%)

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date-13.55%; #3626/6202 (top 58.5%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Verdicts23% pass✓ 3✗ 10▾

  Split decision: 9 FAIL · 4 NEUTRAL · 3 PASS

  Overall verdict

  ✗GrahamFAIL (1/9)✓BuffettPASS (4/9)✗LynchFAIL (2/7)✗GreenblattRank #1165•PiotroskiNEUTRAL (F-Score 7)✓DremanPASS (5/11)✗MungerFAIL (1/4)•PabraiNEUTRAL (2/3)✗AkreFAIL (0/6)✗MarksFAIL (1/5)✓AckmanPASS (4/9)✗TempletonFAIL (3/8)•SleepNEUTRAL (4/6)•AsnessNEUTRAL (Not ranked)✗NeffFAIL (2/6)✗SchlossFAIL (1/7)✗OshaughnessyFAIL (Rank #841/963 (Top 87.3%))
• Profitability25% pass✓ 15✗ 20▾

  12 of 16 flag CRK's profitability — Graham, Buffett, Lynch +9 more

  Net income / market capitalization+9.41%; #736/6340 (top 11.6%)

  ✓AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive EPS (10 years)6/18 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)6/18 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)7.5%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)29.1% (latest)

  ✓BuffettStable or rising over 10 years

  Free Cash Flow Proxy$395.6M

  ✓BuffettPositive and growing

  Earnings Variance (10-yr CoV)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)P/E 10.6x (growth N/A)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR-29.7%

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  ROE16.1%

  ✓Lynch> 15%

  EBIT / Enterprise Value7.7%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=7.7%, ROC=9.0%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets5.65%

  ✓PiotroskiROA > 0

  ROA Change YoY-3.60% -> 5.65% (delta: +9.24%)

  ✓PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=12.84%, ROA=5.65%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY

  ✗PiotroskiImproved YoY

  Pre-Tax Income / Revenue25.3%

  ✓Dreman>= 8%

  Net Income / Shareholders' Equity16.1%

  ✓Dreman> 12%

  Margin of SafetyP/E=10.6x, P/B=1.7x

  ✓PabraiP/B < 1.5 or P/E < 15

  Return on Equity4.6% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic Value-112.3% (IV=$7.15 vs Price=$15.18)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency6/17 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue28.4%

  ✓Ackman>= 15%

  Net Income / Shareholders Equity16.1%

  ✓Ackman>= 15%

  5-Year EPS CAGR-29.7% CAGR over 3 years

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend14.5% (2023) -> 29.1% (2025)

  ✓TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendrevenue up, operating margin 14.5% -> 29.1%

  ✓SleepRevenue rising; gross margin flat or falling; operating margin holding

  Gross profit / total assets

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity+16.08%; #1059/5226 (top 20.3%)

  ✓AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.0895; #3340/5884 (top 56.8%)

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR-29.7% over 3 years

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years4/9 years positive

  ✗Schloss>= 70% positive over 5-10 observed years (app rule)
• Efficiency25% pass✓ 4✗ 7▾

  6 of 8 flag CRK's efficiency — Graham, Greenblatt, Dreman +3 more

  Current Ratio0.60

  ✗Graham>= 2.0

  ROIC (3-5 yr avg)14.3%

  ✓Buffett> 10%

  ROIC - WACC+4.3%

  ✓BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)9.0%

  ✗Greenblatt> 25%

  Current Ratio Change YoY0.46 -> 0.49

  ✓PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY0.20x -> 0.32x

  ✓PiotroskiImproved YoY

  Current Assets / Current Liabilities0.60

  ✗Dreman> 1.5

  Return on Invested Capital8.0%

  ✗Munger> 15%

  ROIC (high and growing)FY2023: ROIC=3.6%; FY2024: ROIC=-2.6%; FY2025: ROIC=9.4%

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROIC9.4% (RR=100% x ROIC=9.4%)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)2/5 years above 12% (latest 9.4%)

  ✗SleepROIC > 12% in a majority of years
• Valuation models43% pass✓ 3✗ 4▾

  Models split on CRK at $15.18 — fair values range $6.30–$23.21

  Graham fair value$17.02

  ✓Graham+10.8% margin vs $15.18

  Buffett fair value$15.90

  ✓Buffett+4.5% margin vs $15.18

  Greenblatt fair value$6.30

  ✗Greenblatt-141.0% margin vs $15.18

  Dreman fair value$7.15

  ✗Dreman-112.3% margin vs $15.18

  Pabrai fair value$23.21

  ✓Pabrai+34.6% margin vs $15.18

  Akre fair value$11.75

  ✗Akre-29.2% margin vs $15.18

  Templeton fair value$11.86

  ✗Templeton-28.0% margin vs $15.18
• Cash Flow50% pass✓ 6✗ 6▾

  5 of 10 pass — Lynch, Marks, Ackman +2 more object

  Free Cash Flow Proxy$395.6M

  ✓BuffettPositive and growing

  FCF Positive and Growing$-818.8M

  ✗LynchPositive and growing

  Operating Cash Flow$899.6M

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=12.84%, ROA=5.65%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)5.0x

  ✓Dreman< 8x

  P/E or FCF YieldP/E=10.6x, FCF Yield=-10.1%

  ✓PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive4/17 years FCF positive

  ✗MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap-18.3%

  ✗Ackman>= 4%

  Price / FCF per ShareN/A (negative FCF)

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency16/17 years positive

  ✓SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures$-818.8M

  ✗Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization-18.37%; #3485/4519 (top 77.1%)

  ✗OshaughnessyTop 10% of eligible cross-section