A little more than a month ago, I argued that investors had overreacted to Texas Instruments' (NYSE: TXN) first-quarter earnings warning. Today, with the shares trading around where they closed after the March sell-off, I don't think the story has changed.

As you may recall, on March 10, TI warned investors to expect $3.28 billion in revenue for the just-concluded quarter, and earnings of about $0.43 per share. As it turned out, TI was right on the money, or nearly so. Revenue came to $3.27 billion in yesterday's news (up 3% year over year), and earnings were $0.49 (which, if you subtract $0.06 worth of tax benefits, comes to the predicted $0.43).

All of that would be pretty good news, if only these numbers weren't a good sight lower than what we were expecting as recently as early last month. In large part, we've learned that the culprit(s) for the downturn are TI customers such as Nokia (NYSE: NOK), Sony (NYSE: SNE), and Ericsson (Nasdaq: ERIC), all of which have reportedly switched their cell-phone chip sourcing from exclusive relationships with TI to a more multipolar approach, in which Broadcom (Nasdaq: BRCM) and STMicro (NYSE: STM) get their fair shares of the pie.

Buy the numbers
Listen, I get that analysts were upset when TI did not promise the kind of revenue numbers the market expected. Management says it might earn $0.48 per share this quarter; Wall Street says it must. Management predicts a range of $3.24 billion to $3.50 billion in sales this quarter; Wall Street expects ... $3.5 billion, on average. So what?

None of that changes TI's dirt cheap status -- provided you can look past the near-term "challenging" business environment, and focus instead on TI's valuation. Reviewing yesterday's report, we see that TI generated $422 million in free cash flow, bringing the firm's total to nearly $3.8 billion over the past 12 months. The way I look at these things, that means the stock is selling for almost precisely 10 times free cash flow. Analysts project a growth rate of 16% per year over the next five years.

Summing up the quarter's news, CEO Rich Templeton tells us that "we believe our long-term opportunity is excellent." For investors, I'd add that today's sell-off provides a similarly excellent opportunity to buy TI.

For more on TI, read:

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Fool contributor Rich Smith does not own shares of any company named above. The Motley Fool has a disclosure policy.