“Moving to the sidelines.” That’s a Wall Street euphemism for “we’re not sure what to make of this stock.” And that’s just what Wall Street analysts did as a group on Thursday, uniformly cutting their rating on marketing firm Vistaprint (Nasdaq: VPRT) to “hold” or “neutral”. Analysts thought the stock was a “hold” at Wednesday’s closing price of $50, but shares fell to $32 on Thursday and are only now trading modestly higher.

Which leads to the question: Are the shares still a “hold” at that far lower level? Or is there a bargain to be had?

As a large-scale print marketing firm targeting small businesses across the globe, it should come as no surprise that quarterly results would be hurt by a slow economy. To be sure, it was hard to justify sticking with a “buy” rating after the second straight disappointing quarter. Shares might not deserve to trade at $50 right now, but they certainly didn’t deserve the drubbing they received. A closer look reveals a solid long-term grower that is wrestling with some real, but temporary challenges in 2010.

Vistaprint missed fiscal fourth quarter sales estimates by about 3% and profits were roughly in line with forecasts. But beyond the numbers things get a little noisy. For example, Vistaprint’s investments in new markets such as Singapore, Australia and Portugal, along with other infrastructure investments, mean that costs are rising at an accelerated pace this year. Management notes that the weak economy in the United States and Europe will likely lead to slower sales growth in the current fiscal year than had previously been thought. It doesn’t help that Vistaprint has a high degree of exposure to the weak euro.

Beyond the macro view, investors grew concerned on the conference call when management noted that recent marketing changes were ill-advised, and would likely be revamped again. That’s led to an impression that management has lost its way. Sales had risen at least +28% in each of the past five fiscal years, and Thursday’s sell-off implies that growth has quickly dried up. Instead, view this as a sales slowdown before the economy rebounds.

Admittedly, many investors fled the stock because the next few quarters won’t yet show signs of a turnaround. Year-over-year quarterly sales gains, which had already been decelerating in recent quarters, will likely only be +10% to +15% in each of the next two quarters. (Many companies would love to post those growth rates in these challenging economic times).

More importantly, the company’s international expansion should yield fruit in the second half of fiscal 2011 (the first half of calendar 2011). After that, the U.S. and European economies should start to power back to life, perhaps in 2011, perhaps in 2012. That should enable Vistaprint to start to grow at a +15% to +20% clip again, as the markets it serves are fairly unsaturated.

Of course that growth rate is a far cry from historical levels. After boosting sales from $90 million in fiscal 2005 to $670 million in fiscal 2010, investors should have assumed that such a large sales base makes continued +30% to +40% growth unsustainable. So Thursday’s sell-off is about re-setting expectations. But those expectations have been re-set far too bearishly.

Smith Barney seemed to echo the sentiment of many analysts by noting: “Key to our new Hold — not Sell — call is that we don’t see structural or competitive issues at play here,” adding that short-term factors such as weak spending among small and medium-sized businesses will remain in place in the very near-term. The firm lowered its price target from $62 to $45, but that lower price is still about +35% higher than where shares are trading today. And it sounds like that price target change would be reversed once these issues abate — shares trade for half of Smith Barney’s once and possible future price target.

Action to Take –> Thanks to the recent internal sales execution and foreign exchange issues, Vistaprint was only able to boost earnings per share by +13 % in the year just ended. Per share profits may only grow around +10% in fiscal 2011 to around $2.20. On a calendar-year basis, profits should be closer to $2.50 in 2011.

Shares now trade for just 12 times that forecast. Once Vistaprint gets past these near-term hurdles, investors are likely to anoint a more robust multiple for the stock, perhaps closer to 20 times projected profits. Shares may have fallen from $50 to $32, but they should move their way back toward the $50 mark once these near-term clouds recede.