"Gimme five. Up high. Down low."

"Not so fast," say Palm (NASDAQ:PALM) investors. You got us with that one last quarter.

When this Motley Fool Stock Advisor recommendation reported earnings back on Sept. 22, investors reacted violently to the firm's admission that earnings declined 7% despite a 25% rise in revenues, stomping the shares by 18% (of which the shares have since recovered just 3% in three months). As if the earnings shortfall wasn't bad enough, Palm warned investors that its earnings for fiscal Q2 2006, due out tomorrow after close of trading, would come in on the light side.

How light? It's hard to say at this point. The company hasn't provided any guidance since that September report, and the report itself was about as transparent as a lump of Christmas coal. Depending on a variety of factors, ranging from business-related to tax planning-related to whether you like your profits in GAAP or pro forma flavor, the company expects to report a profits number tomorrow that could range anywhere from $0.38 per diluted share (pro forma, including "release" of a "deferred tax asset valuation allowance") to $5.20 per share (under GAAP, with the same "release" boosting earnings), or from $0.55 (GAAP, no release) up to $0.65 (pro forma, no release.)

Confused yet? I know I am. And even the analyst predictions shown on Yahoo! Finance don't help a whit, because they don't tell you what assumptions they're based on, or to which earnings "flavor" they refer. At best, a Fool can only guess that when analysts say they expect Palm to report $0.43 in profits tomorrow, they're probably referring to the company's own top guidance under the "pro forma, including release" scenario.

So what's a Fool to do? As we so often urge, the solution to the GAAP-pro forma-analyst ambiguity dilemma is to focus on a single criterion for judging a company's true cash profitability: free cash flow. Palm makes this easy for us: It provides a statement of cash flows in every earnings release. For instance, last quarter, this statement revealed that the company generated $41.6 million in free cash flow in its fiscal first quarter, up 46% from last year's $28.5 million, and 37% sequentially from fiscal Q4 2005's $30.4 million.

Whatever tomorrow's earnings numbers turn out to be, under whatever flavor suits you -- analysts or the company's own fancy -- that's impressive growth. Yet even without that growth rate, the company's $111 million in free cash flow over the past four quarters would make it a "buy" at the current enterprise value of $1.1 billion. Hands down.

Fools of a feather rarely agree on whether a stock's a bargain. (That's what makes working here so much fun.) Read Nate Parmelee's contrary view of Palm's prospects in Palm's Fuzzy Outlook.

Fools, now is the time to open your hearts and wallets to worthy causes! Please support our five Foolish charities at www.foolanthropy.com .

Fool contributor Rich Smith does not own shares of Palm. Yet.