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What happened

Shares of industrial distributor HD Supply Holdings Inc (NASDAQ:HDS) fell as much as 17.1% on Wednesday after reporting earnings. At 11:50 a.m. EDT, shares were still down 15.4%.

So what

Fiscal second-quarter sales rose 4.1% to $2.0 billion, and net income fell 10.1% to $98 million, or $0.49 per share. Adjusted for one-time items, earnings were $171 million, or $0.85 per share, but still fell $0.03 short of estimates. 

The other bad news was third-quarter guidance of $1.99 billion to $2.04 billion in revenue, with earnings of $0.77 to $0.82 per share. Next quarter, analysts were expecting revenue to be $2.06 billion and earnings to be $0.91 per share. 

What shouldn't go overlooked is that management still expects to grow the top line between 3% and 6% this year, and to take market share from competitors. That may not meet the market's expectations, but it's a good result nonetheless.

Now what

When a company misses expectations, it can cause a huge reaction in the stock market. But this move should be put into perspective. Analysts are expecting HD Supply Holdings to earn $2.72 per share this year, meaning the stock trades at 11 times earnings. And revenue is going to grow mid-single digits as well.

I think the market's reaction is a bit overdone, given the growth and value shares are at today. And for long-term investors looking for a company with stable cash flows, HD Supply Holdings is a great option.

Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.