Is Comstock Resources, Inc. overvalued or undervalued?

As of 30 July 2024, the valuation grade for Comstock Resources, Inc. has moved from very expensive to risky. Based on the analysis, the company appears to be overvalued. The P/E ratio stands at an exceptionally high 141, while the industry average P/E is significantly lower, indicating a stark disparity. Additionally, the EV to EBITDA ratio is 14.73, which is considerably higher than peers like Magnolia Oil & Gas Corp. at 6.05 and SM Energy Co. at 2.93, further supporting the overvaluation conclusion.
In terms of profitability, Comstock's ROE is only 2.39%, and its ROCE is negative at -1.51%, suggesting inefficiencies in generating returns on capital. The PEG ratio of 0.91 does not provide enough justification for its high valuation, especially when compared to peers with much lower valuations and better performance metrics. Despite recent strong stock performance, including a 175.35% return over the past year, the fundamental ratios indicate that Comstock Resources, Inc. is overvalued relative to its peers and the broader market.