In the past three quarters, the stock of women's apparel company bebe stores (NASDAQ:BEBE) has gone from overpriced to a deep discount. OK, so "deep discount" isn't entirely accurate, but after being cut in half within the past year, it's certainly much more reasonably priced.

This chain designs and sells women's clothes and accessories at its 228 stores. While bebe's performance has slowed recently, it's still not doing too badly, and there are many reasons to like this company. For its fiscal second quarter, bebe reported earnings of $25 million, or $0.27 per share, up slightly from last year's net income of $24.3 million and in the middle of its guidance.

Sales jumped 10% to $167.9 million in the quarter. While that top-line growth rate is not bad, however, same-store sales managed to grow only 2.2% in the quarter.

Looking ahead to next quarter, bebe expects same-store sales growth in the mid-single digits, and earnings between $0.11 and $0.15 per share. That would be flat to modest growth over Q1 2005, and while this type of slow growth isn't what we've come to expect of bebe, it shouldn't be discounted. Its continued growth after its previous torrid pace is a good sign for the retailer.

Another reason I like bebe is its aggressive but well-managed expansion plans. For the year, it anticipates opening 35 new stores and expanding its overall square footage by approximately 16%.

I've written about bebe's impressive performance in the past, but I always thought it was priced at a premium. Apparently, I was right. Will miracles never cease? Now that it's been knocked down a bit, I think it's a great time to add a solid company to your portfolio. Though it will likely continue to be volatile, it should trend upward over time.

Fool contributor Mike Cianciolo welcomes feedback and doesn't own shares of bebe.