Shares of electrical equipment supplier Wesco International (WCC -0.95%) tumbled 23% through 11:40 a.m. ET on Tuesday after the company reported big misses on both sales and earnings this morning.

Heading into earnings day, analysts had forecast that Wesco would report an adjusted profit of $3.87 per share on sales of $5.6 billion. Instead, Wesco reported only $5.5 billion in sales and a profit of just $2.65 per share, adjusted for one-time items.

Wesco International sales and earnings

Sales for the fourth quarter of 2023 declined 2%, a disappointing end to a year in which full-year sales rose 4.5%. Earnings as calculated according to generally accepted accounting principles (GAAP) were a bit worse than the adjusted number shown above. GAAP earnings declined 37% year over year to just $2.45 per share.

On the plus side, as already noted, sales for the year did grow 4.5%. However, the steep decline in Q4 profits took its toll on full-year earnings results as well. For all of 2023, Wesco reported a profit of $13.54 per share, down 12% from the $15.33 per share earned last year.

Is Wesco stock a sell?

So Wesco had a bad quarter. Does this make the stock a sell?

Not necessarily. For one thing, CEO John Engel says the company is still riding "long-term secular growth trends" in its end markets, which include utilities, data centers, security, network infrastructure, and industrial markets. For this reason, management thinks sales will resume growing in 2024 -- up 1% to 4%. Free cash flow (FCF), meanwhile, will go from strength to strength. Wesco generated more than $400 million in FCF in 2023. In 2024, the company predicts positive cash profits of anywhere from $600 million to $800 million this year.

Taken at the midpoint, that means Wesco stock is selling for less than 11 times current year free cash flow -- free cash flow that is expected to grow 75% this year. Granted, long-term growth forecasts for the company are much lower than that -- just 10% annually over the next five years. But to me at least, 11x FCF for a company growing even just 10%, and paying a 0.8% dividend, seems a very fair price to pay.