What happened

Shares of Party City (NYSE:PRTY) popped 15% in early trading Friday, after the party supplies retailer reported fiscal Q4 and full-year 2017 earnings that beat analyst estimates. GAAP profits for the quarter came at $1.58 per share, topping expectations by $0.01. Sales likewise exceeded analysts' estimates.

As of 11:45 a.m EST, Party City stock was up 9.5%.

Many colorful balloons with strings tied to them

Image source: Getty Images.

So what

Party City reported $789.6 million in Q4 sales, up 4% year over year and "in line with our expectations," according to CEO James Harrison.

Sales for the year as a whole likewise rose 4%, to $2.4 billion, and gross profit margins on those sales were up 40 basis points for the year, at 40.8%. Profits soared 83% to $1.79 per diluted share, boosted by "non-recurring income tax benefits related to the Tax Cuts and Jobs Act of 2017.

Now what

Arguably best of all, Party City reported generating $342.2 million in positive free cash flow (FCF) for the year. Even with its hefty debt load inflating Party City's $1.6 billion market capitalization to a $3.5 billion enterprise value (EV), this gives Party City stock a modest EV/FCF ratio of just 10.2 -- not at all a bad price to pay for a company that analysts think has the potential to grow earnings as much as 20% annually over the next five years.

Even though shares are now 9.5% more expensive after earnings, I can't help but think that Party City stock looks an awful lot like a buy today.