PreMarket Prep Stock Of The Day: Snowflake

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.

The extremely volatile price action in Snowflake Inc. SNOW since its IPO in September continued in Thursday’s session following the company's first-quarter report.

The whipsaw price action makes Snowflake the PreMarket Prep Stock of the Day.

The Company: Founded in 2012, Snowflake is a data lake, warehousing, and sharing company that came public in 2020. To date, the company has over 3,000 customers, including nearly 30% of the Fortune 500.

Snowflake's data lake stores unstructured and semistructured data that can then be used in analytics to create insights stored in its data warehouse, Overall, the company is known for the fact that all of its data solutions can be hosted on various public clouds.

Snowflake Doubles Off IPO: The always volatile issue had a flurry of price action on its first day of trading on Sept. 16, 2020. After opening at $245, it rallied to $319 and reversed course. It had a nearly $88 decline to $231.11 and rebounded to end the session at $253.99.

Six sessions, later it bottomed at $208.55 and embarked on a monster rally. It finally peaked on Dec. 6 at $429 and posted its higher close at $390 that day as well.

The Snowflake Meltdown: Similar to the price action on the way up, the retreat in Snowflake was fast and furious.

It backed off its all-time high to end the year at $281.41. It attempted to rebound, but found sellers in the same area in January ($325.72) and February ($327.41) and failed miserably, ending February at $259.54.

The retreat continued this month until the issue finally bottomed on May 13 at $184.71.

Snowflake Rallies Ahead Of Q1 Report: Since making the low for the move, the issue was higher in eight of the last nine sessions. The highest close for the rebound came on Wednesday. Ahead of the report, the issue put in a trio of highs in a narrow area ($236.36-$236.94).

Snowflake's Q1 Report: After the close on Wednesday, the company reported a first-quarter EPS beat — a loss of 12 cents per share against estimates of a 16 cents — and a sales beat, which came in at $228.991 million against a $212-million estimate.

The report failed to impress Wall Street analysts, as five firms reduced their price targets after the print. 

PreMarket Prep's Take: When the issue was being covered on the show Thursday, it was trading at the $230 area, substantially higher than its after-hours low of $215.42.

Co-host Dennis Dick said he regretted not buying the issue on that dip.

“I would buy the dip in this one. The earnings report really does not matter [with] growth coming back into favor.”

The full discussion on the issue from Thursday’s show can be found here:

After a lower open, the issue continued lower, falling to $220 and then caught a relentless bid. It easily cleared Wednesday’s low ($228.30), the close of $235.25 and even breached the trio of highs in the $236 handle. 

The stock ultimately gained 4.05% in the session, closing at $245.15. 

In early March through late April, the issue posted nine daily highs ranging from $240 to $243.49.

Photo courtesy of Snowflake.