PreMarket Prep Stock Of The Day: Pinterest

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

For those who don't have the time to tune in live or listen to the podcast, Benzinga will highlight one stock that merits further discussion. This analysis is not a buy or sell recommendation.

There were several big earnings reports that resulted in some major moves to end the week. Perhaps one company that was flying under the radar produced one of the biggest upside surprises in relation to price action. That company is Pinterest Inc PINS and is the PreMarket Prep Stock Of The Day.

Winner Off Its IPO: Pinterest debuted in April 2019 and was well received out of the gate. It bottomed on its first day of trading at $23.05 and embarked on a rally. By August, it reached $36.83 and fell back to just above the area of its IPO by October.

After the close on Oct. 31, 2019, the company announced an EPS beat of a nickel but came up shy on sales. For such a slight sales miss, the issue was slammed.

On the following trading day, it swooned from $25.14 to $20.86 on heavy volume. Slicing through its IPO price overnight caught many investors long the issue and heading for the exit.

It continued lower until it finally bottomed in January at $18.22 and ended February just off that low at $19.50.

Then Comes The COVID-19 Crisis: Just as the broad market went into a freefall in March, so did shares of Pinterest. From its February month-end close, it was nearly cut in half when it bottomed on March 18 at $10.10, which was a few days prior to the bottom in the S&P 500 Index on March 23.

Back Above IPO Price And Then Some: The issue more than participated in the rally, rallying 170% when it reached $27.22. Ahead of the report, it drifted lower, ending Thursday’s session at $25.19.

Before the open, the company announced an earnings sales beat of 6 cents along with a sales beat of $21.25 million. What really caught the Street's attention was monthly active users grew by 39% year over year.

Price Action When Being Covered On The Show: Co-host Dennis Dick was disappointed he didn't get this right ahead of the report.

"I am mad at myself," he said. "I wanted this in my long-term portfolio, but traded it and did not add it.

"Just think what people have been doing over the last quarter, sitting at home all bored and dong the mind-numbing exercise of surfing the internet."

The author of this article noted that the all-time high was in reach at $36.84, but first had to take out the pre-market high, which at the time was $34.75. It went to make a pre-market high of $35.36.

Price Action Off The Open: After a higher open, it went on in an attempt to challenge the pre-market high but came up short, reaching $34.50 and reversing course. A wave of sellers sent the issue to make a new low for the day at $31.09, but rebounded back into the $33 handle.