As we've all come to expect, companies that warn on sales typically get taken out back to the stock market's woodshed for a thorough sell-off. In contrast, however, Group 1 Software's (NASDAQ:GSOF) sales warning this morning only induced a modest 2.5% to 3.0% decline on light volume. What gives?

For one, the warning was mild in nature, and it comes in what is widely known to be Group 1's weakest quarter of the year. First-quarter revenue growth is now projected to be only 1.5%, well below the 10% to 12% growth outlook for the full year. As bad as that sounds on the surface, the revenue shortfall was due to a reasonably justifiable timing issue on some sales that came in soon after the quarter's end. Also softening the blow is the fact that first-quarter EPS growth will be quite strong at 57% to 88%, in line with one public analyst estimate.

In addition, today's mild stock decline may be a sign that any potential sellers have already been shaken out. After hitting a 52-week high of $23.30 on June 4, Group 1 has been drifting down pretty steadily. At today's price of around $17.70, the stock is already 24% off its highs. After selling off that far, today's news may not have justified much further selling.

This is especially true considering Group 1's reasonable valuation. At $17.70, Group 1 trades for a very reasonable 16 times trailing free cash flow. And with today's reaffirmation of 10% to 12% sales growth for the coming year, the current price looks, if anything, to be on the undervalued side.

At time of publication, Matt Richey was long on Group 1 Software.