Women's retailer Ann Taylor (NYSE:ANN) got pretty well hammered last Friday and is dribbling down today. The crime? Earning a couple pennies more than average analyst expectations for Q3, or $0.54 per share. That was 29% better than last year's Q3 tally, on a total revenue improvement of 10.2%.

What was the culprit? Probably the raised guidance.

"Raised guidance?" you ask. "Ain't that there a good thing?"

Well, not if it doesn't clear the estimate bar set by analysts, and apparently $2.07 to $2.12 per share doesn't git 'r done. Then there's this kind of thing: an AP story (suggested motto: "quotations = journalism") which parrots the concerns of an analyst obsessed with sweaters and inventory.

The larger picture looks fine to me. Same-store sales growth of 2.6% is a bit slim, but that didn't stop gross margins from increasing by 240 bps. Operating margins and net margins both increased by 100 bps or more, as well. Working capital looks good, too, with inventory only increasing 2.5% over the prior-year period.

So what's with the doom and gloom and the sweater thing? Often, this is just the sort of get-my-name-in-print, semi-sensical overthink that gets blown out of proportion. When it spooks the market, that can give bigger-picture investors an opportunity.

So, now that this formerly hot stock has tumbled, is it buying time?

That depends on whether you think the recent turnaround is a flash in the pan or the beginning of something more. Certainly, the current net and free cash flow margins are among the highest in Ann's recent history. To the glass-half-empty types, that will look like "peak" earnings, suggesting whatever's coming up in the future will be worse.

And no doubt, there's plenty of competition in this space from the likes of Talbots (NYSE:TLB), Coldwater Creek (NASDAQ:CWTR), J. Crew Group (NYSE:JCG), Limited Brands (NYSE:LTD), and Gap (NYSE:GPS).

For my part, unless a company's smaller than Ann, and has a lot of room to run, I tend to believe more of the glass-half-empty side of this story -- that we're seeing something akin to the best of times. That doesn't mean I think shares are terribly overpriced; my best-guess valuation model pegs them at about fair value. But given the market's habit of overdoing everything, I'm pretty sure we'll see a better sale on Ann Taylor in the not-so-distant future. I like a bargain, so to me, the bidding starts at about $30 a share.

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At the time of publication, Seth Jayson had no positions in any company mentioned here. View his stock holdings and Fool profile here. See what he's digging these days. Fool rules are here.