Corning (NYSE:GLW) investors regained some measure of sanity on Wednesday, buying back shares after selling them off by as much as 4.5% at one point on Tuesday in response to an earnings beat.

Obviously, today's buying makes a lot more sense than yesterday's selling, and to see why, all you have to do is take a look at the numbers Corning produced:

  • Sales up 4%;
  • Per-share profits rising 39% (to $0.43 per share); and
  • Free cash flow showing continued strength -- now clocking in north of $1.5 billion for the past 12 months, vs. $1.4 billion at the end of last year

On the one hand, it's true that Corning still isn't generating as much cash profit as it claims to be "earning" under GAAP. Fact is, Corning's really only generating about $0.79 in real cash profit for every $1 of supposed "net income" in records. That said, $1.5 billion is still enough money to give the stock a 15 times price-to-free cash flow ratio. And if you factor Corning's sterling balance sheet -- where cash on hand outweighs debt on the books by a good $2.9 billion -- into the mix, Corning's arguably cheaper still. Its enterprise value-to-free cash flow ratio now stands at just 13.1.

Is that cheap enough to justify a buy on Corning stock? I think so. Analysts peg the company for 12% annualized earnings growth over the next five years. Add in a tidy 2.6% dividend yield and the stock looks about 10% undervalued to me today.

Of course, to justify this valuation, Corning does need to grow at the rate its pegged for. Fortunately, CFO James Flaws says he's expecting his company to produce "good sales and earnings growth" going forward. Glass volumes remain strong. Gorilla Glass sales are rising steadily, up 10% year over year in Q2. And although declines in the selling price of glass are a secular issue in Corning's industry, Flaws says they're not as bad as they might be.

Long story short, even if the analysts are right and Corning doesn't grow earnings a whole heck of a lot this year in comparison to its 2012 numbers, its long-term outlook still looks bright.