Comstock Resources (NYSE:CRK) Will Be Hoping To Turn Its Returns On Capital Around

Explore Comstock Resources's Fair Values from the Community and select yours

If we want to find a stock that could multiply over the long term, what are the underlying trends we should look for? Firstly, we'll want to see a proven return on capital employed (ROCE) that is increasing, and secondly, an expanding base of capital employed. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. However, after investigating Comstock Resources (NYSE:CRK), we don't think it's current trends fit the mold of a multi-bagger.

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Return On Capital Employed (ROCE): What Is It?

For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. Analysts use this formula to calculate it for Comstock Resources:

Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)

0.026 = US$152m ÷ (US$6.7b - US$748m) (Based on the trailing twelve months to June 2025).

Thus, Comstock Resources has an ROCE of 2.6%. Ultimately, that's a low return and it under-performs the Oil and Gas industry average of 9.3%.

View our latest analysis for Comstock Resources NYSE:CRK Return on Capital Employed August 13th 2025

In the above chart we have measured Comstock Resources' prior ROCE against its prior performance, but the future is arguably more important. If you'd like to see what analysts are forecasting going forward, you should check out our free analyst report for Comstock Resources .

The Trend Of ROCE

On the surface, the trend of ROCE at Comstock Resources doesn't inspire confidence. Around five years ago the returns on capital were 5.2%, but since then they've fallen to 2.6%. However, given capital employed and revenue have both increased it appears that the business is currently pursuing growth, at the consequence of short term returns. And if the increased capital generates additional returns, the business, and thus shareholders, will benefit in the long run.

Our Take On Comstock Resources' ROCE

Even though returns on capital have fallen in the short term, we find it promising that revenue and capital employed have both increased for Comstock Resources. And long term investors must be optimistic going forward because the stock has returned a huge 162% to shareholders in the last five years. So while the underlying trends could already be accounted for by investors, we still think this stock is worth looking into further.

Story Continues

One more thing, we've spotted 1 warning sign facing Comstock Resources that you might find interesting.

While Comstock Resources isn't earning the highest return, check out this freelist of companies that are earning high returns on equity with solid balance sheets.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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