Page 47 of the big rule book: "After determining how much damage the [model] would take, but before applying the damage, the model may spend a Soulstone to make a damage prevention flip."
So the question is, does Armor factor into determining how much damage you take. A few paragraphs earlier on pg 46 at the bottom of Damage and Wounds states: "If damage is modified by a static value (such as the Armor Ability, or a Trigger), the final damage after the damage flip is modified." So yes, armor is factored into how much damage a model would take, meaning Armor is applied before the prevention flip is made.
santaclaws01's post in Order of combat effects - armour and damage prevention was marked as the answer