True to form, Friday the 13th wasn't kind to shareholders of furniture maker and Motley Fool Hidden Gems selection Hooker Furniture (NASDAQ:HOFT). In an unexpected development, the company released an earnings warning this morning, advising investors that its previous expectations of flat sales against the year-ago quarter were actually optimistic. Its new prediction: a year-on-year sales decline of 5-7%.

In response, the market followed up last quarter's 17% roundhouse blow to Hooker with a quick left hook that shook the company for another 9% loss. In all, Hooker's stock has now lost 26% of its value over the past 52 weeks, bringing it almost full circle back to where it was when originally recommended by Hidden Gems in August 2003.

On the one hand, that's terribly disappointing news. But on the other hand, it may just be the market's backhanded way of offering investors a second chance to buy Hooker at the price at which we originally recommended it. Should investors accept this offer or spurn it? Let's crunch some numbers and find out:

In the first quarter of 2005, Hooker produced sales of $80.5 million. Combined with the new projections of $86 million (or thereabouts) in sales for Q2, the company's new sales run-rate for fiscal 2005 is roughly $333 million. Last year, sales totaled $346 million, which translated into profits of $1.56 per diluted share. So in fiscal 2005, we're probably going to be looking for something in the neighborhood of $1.50 per diluted share in profits, absent significant margin improvement in coming quarters.

After today's shellacking, Hooker's stock currently trades for $15 a stub, making for the easiest of P/E ratio calculations: Hooker trades at a P/E of 10. Now, there are a couple of ways to work from that P/E to determine whether Hooker is a buy. Yahoo! Finance currently quotes analysts predicting 13.5% growth for Hooker over the long term, giving the company a forward PEG of 0.74 (a bargain). However, the historical numbers show that Hooker has actually averaged growth of just 10.5% over the past five years -- suggesting that if the company returns to its previous pattern of growth, it's at best fairly priced today.

More takes on Hooker Furniture, couched in Foolish terms:

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Fool contributor Rich Smith owns shares of Hooker Furniture. The Fool has a disclosure policy.