What happened 

Shares of Clearwater Paper Corporation (CLW 1.73%) fell as much as 19% in trading on Tuesday after reporting third-quarter 2022 financial results. The stock closed down 16.7% on the day. 

So what 

Revenue was up 20% in the quarter to $539 million, and net income was $21 million, or $1.21 per share. Revenue was slightly above estimates, and adjusted earnings per share (which pulls out one-time items) of $1.83 per share was well over the $1.52 that analysts expected. 

The outlook for the fourth quarter was a little more muted. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) is expected to be $38 million to $48 million, below the $77 million in the third quarter, on higher costs and lower volumes, due to seasonality.

Now what 

The market's reaction wasn't positive but there's a lot to like in this earnings report. Management has paid down $73.3 million in debt so far this year and cash on hand has doubled to $50.8 million. 

Clearwater Paper is a very profitable business. With an improving balance sheet and a market cap of just $621 million, it's a great value for investors.

In fact, the enterprise value of the company, compared to the expected 2022 EBITDA of $237 million to $247 million, is just five times the low end of the range. That's a great value. If management can continue churning out cash and returning it to shareholders, this should be a great stock to buy and hold.