Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified PDC Energy ( PDCE) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified PDC Energy as such a stock due to the following factors:

  • PDCE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $54.9 million.
  • PDCE has traded 186,988 shares today.
  • PDCE is down 3.3% today.
  • PDCE was up 5.7% yesterday.

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More details on PDCE:

PDC Energy, Inc., an independent exploration and production company, acquires, explores for, develops, and produces crude oil, natural gas, and natural gas liquids in the United States. The company operates in two segments: Oil and Gas Exploration and Production, and Gas Marketing. PDCE has a PE ratio of 17.6. Currently there are 15 analysts that rate PDC Energy a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for PDC Energy has been 1.1 million shares per day over the past 30 days. PDC Energy has a market cap of $1.9 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.75 and a short float of 20.2% with 5.29 days to cover. Shares are up 22.2% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates PDC Energy as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • PDCE's very impressive revenue growth greatly exceeded the industry average of 19.6%. Since the same quarter one year prior, revenues leaped by 201.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 898.2% when compared to the same quarter one year prior, rising from $13.20 million to $131.75 million.
  • The current debt-to-equity ratio, 0.58, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.48 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • PDCE has underperformed the S&P 500 Index, declining 13.82% from its price level of one year ago. 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.
  • Net operating cash flow has decreased to $34.72 million or 12.36% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, PDC ENERGY INC has marginally lower results.

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