As part of every earnings season, the stock market knocks some stocks down onto the discount rack. Sometimes this is justified due to a company's underperformance, poor outlook, or a dividend cut. Other times, the market focuses on the wrong metrics and misprices a top stock. That's the time for savvy investors to go bargain shopping. 

Two stocks in bargain territory after their most recent earnings reports are iRobot (NASDAQ:IRBT) and Apache Corporation (NYSE:APA).

A banner reading Sale in a shop window

Some of the best bargains in the stock market can be found after earnings season. Image source: Getty Images.

Managing expectations

Robotic vacuum manufacturer iRobot saw its shares tumble by 22% after it reported a decline in earnings and quarterly revenue that didn't live up to Wall Street's expectations. Analysts had been forecasting Q1 2019 revenue of $251.4 million, which would have been a year-over-year increase of 15.3%. iRobot actually posted revenue of $237.7 million, a 9% increase over the prior-year quarter.

If that doesn't sound like much of a miss to justify a more-than-20% sell-off, you're right, especially when you consider that per-share earnings beat Wall Street's expectations by 66.1%. True, adjusted earnings were down 15% from the prior year, and operating expenses were up 7%, but that's hardly surprising considering the company is investing heavily in research and development right now as it prepares to launch a robotic lawn mower and an as-yet-unnamed mystery product in Q2.

Certainly, iRobot's management didn't seem fazed by the quarter's performance. iRobot doesn't give quarterly guidance, so there isn't a hard number that we can use as a benchmark, but on the earnings call, CFO Alison Dean indicated that the quarter was more or less in line with expectations, and CEO Colin Angle increased the company's guidance for 2019 earnings per share while reaffirming revenue and operating income expectations. 

So, the company's hot prospects haven't changed, but the price hit has knocked its valuation way down. The company's P/E ratio is just 28.3, near a two-year low. Now's a great time to buy this great growth stock at a bargain basement price. 

A bet on a recovery

Unlike iRobot, whose shares have been trending higher and higher over the last few years, oil and gas driller Apache Corporation's shares have been trending lower and lower. Apache hasn't gotten a lot of respect from the market, even when it posts impressive production numbers and solid earnings.

Q1 2019 wasn't one of those quarters.

Apache's quarterly production numbers were impressive as the company continues to increase the amount of oil and gas it pumps out of its Alpine High play in the Permian Basin. The company also jettisoned some low-margin assets in the SCOOP/STACK play in Oklahoma to better focus its resources on the high-margin Permian. 

A big problem for Apache, though, is that the Permian's production boom has outstripped transportation capacity, so its oil and gas are getting bottlenecked in the region. A week before its earnings report came out, Apache announced it was temporarily deferring some of its Alpine High natural gas production to avoid having to pay others to get rid of it, which caused the stock to take a hit. 

However, Apache should soon have an outlet for all of that natural gas. Its subsidiary Altus Midstream is partnering with pipeline operator Kinder Morgan on the major Gulf Coast Express pipeline that is expected to come on line in October. At that point, not only will Apache be able to ship 550 million cubic feet of its natural gas per day out of the Permian, but it will get a share of the profits from other shippers' use of the pipeline.

It's possible that the market won't reward Apache even once the Permian bottleneck is resolved. But with shares down 53% over the past three years and a dividend yield of 3.7%, Apache looks like a bargain.

Bargain shopping

Of course, no investment is a total slam dunk. Even a stock that has been unfairly beaten down by the market could have troubles down the road that keep its share price low, or could languish for years before Wall Street suddenly catches onto its true value. 

But for those willing to accept the risks that come with hunting for a bargain, iRobot and Apache could be excellent opportunities for outperformance.