For all the writing I've done on the for-profit education sector over the past year, it appears I've somehow managed to almost entirely neglect post-secondary educator Strayer Education (NASDAQ:STRA). But after Wednesday's news, that's no longer possible.

The company reported record profits and record sales. Yet its stock collapsed, down 18% yesterday. So what's the frequency, Kenneth?

It's hard to tell. Apparently, analysts and investor relations were tuned in to two entirely different frequencies. The company's PR department focused on regaling investors with news of a 15% increase in enrollments, a 22% climb in revenues, and a 24% boost in per-share profits in comparison with the year-ago quarter.

Strayer produced strong free cash flow (FCF) during the quarter, though I'm unable to say exactly how strong. Cash generated by operations was $19.3 million. But the capital expenditures that we deduct from that number to arrive at free cash flow were described differently in the prose portion of the press release than in the cash flow statement. (Not that I'm complaining. Few enough companies even bother to provide cash flow statements as it is.) In prose-speak, Strayer claimed $3.1 million in free cash flow. In table-speak, that number was just $1.6 million. But either way, the worst-case interpretation of the numbers still has the company generating $16.2 million in FCF during Q1 2005. If we annualize that number to project the company's fiscal 2005 total, we could be looking at a company that will create $65 million worth of cash profits for its owners this year.

If things play out along those lines, then the company's stock is currently trading at roughly 18 times forward free cash flow and could prove to be quite a bargain for value-hunting investors. Not as much of a bargain as the stocks of competitors Career Education Corporation (NASDAQ:CECO) or Corinthian Colleges (NASDAQ:COCO), granted. Both of those currently trade at significant discounts to Strayer. But when you compare that 18 times multiple with the 25 multiple sported by Apollo Group (NASDAQ:APOL) or the 22 trailing multiple that ITT Educational Services (NYSE:ESI) carries (ITT's Q1 FCF number was negative), Strayer looks rather attractively priced today.

Yet all of this went unnoticed by analysts. Despite tuning in to the same broadcast that value investors were listening to, analysts heard just one thing: In the second quarter of 2005, the company expects to fail to meet the $0.92 consensus estimates laid down for it. Hence today's stock market static.

Fool contributor Rich Smith owns no interest in any of the companies mentioned in this article.