PreMarket Prep Stock Of The Day: Trade Desk

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.

One high-flyer that reported earnings on Thursday was Trade Desk Inc TTD and its stock is volatile in today's session, making it the Premarket Prep Stock Of The Day.

What Trade Desk Does

Trade Desk Inc is the largest independent demand-side platform. The company markets a software platform used by digital ad buyers to purchase data-driven digital advertising campaigns across various ad formats and devices.

The company's stock debuted in September 2016 at $28.75. It did not find a bottom until November at $22, doubled from that level by March 2017 and ended that year at $45.73.

It more than doubled again in 2018, ending the year at $116.06 and at one point was a four-bagger when it peaked in September at $161.50.

The issue was able to double again in 2019, ending the year not far off its all-time high ($278.86) at $269.18. More of the same in 2020, but it has been a rockier road.

Riding The Market Higher And Lower

The issue followed the broad market higher in the first few months of the year, going on to make an all-time high at $323.78 on Feb. 20.

When the broad market rolled over in late February, it took Trade Desk along with it. During the panic selling in March, the issue swooned to $136 on March 19 and began to rebound. That low coincided with its February 2019 low ($138.58).

Ahead of its earnings report on Thursday, it made a new all-time high ($3727.25) and closing high ($322.50).

Priced To Perfection

After the close on Thursday, the company announced a first-quarter adjusted EPS beat of 8 cents along with a sales beat of $2.32 million. What may be weighing on the issue is the pair of downgrades from RBC Capital and SunTrust.

Following a much lower open, it did not find a bottom until it reached $290.28 and sharply reversed course. The ensuing rally snuck into the bottom of Thursday's range ($313.01), reaching $313.61. It backed off that high and fallen under $310 at time of writing.

Moving Forward

The buy-the-dippers came in fast and furious off the open today. Also, the decline provided some relief to pain of short sellers.

However, after backing off its all-time high made just yesterday, there may be some overhead supply looking to exit the issue as indicated by today's trading action thus far.

Exiting on strength may be challenging. If looking to exit on weakness, a breach of today's low may indicate further downside in the issue after its amazing rally since mid-March.