Orbitz Gains Altitude

Back in December of aught three, when we were still nursing our dot-com IPO hangovers, or at least trying to avoid the smell of our personal financial poisons, Orbitz (Nasdaq: ORBZ) had the guts to both proceed with an initial public offering and be an online travel business.

Many jaded investors will no doubt be surprised to see the firm doing pretty darn well, thank you, even in a field full of tough competition. The company's first-quarter earnings release opens with a good dose of suspicious-looking PRspeak, but there don't appear to be any real headaches. Revenues were up 42% and gross travel bookings were up 38% to $1 billion.

This outpaced boomingSabre Holdings' (NYSE: TSG) still-respectable 27% increase in its first-quarter gross bookings, though a bit slimmer than the beefing-up done by Priceline.com (Nasdaq: PCLN) last quarter, which included a 46% jump in gross bookings.

As at Priceline, Orbitz owed much of its booking and revenue growth to oversized expansion of the hotel business. Those more lucrative segments boosted gross margins an incredible eight points, to 72%. On the bottom line, Orbitz managed $0.04 per share.

Whether or not the stock is fairly priced is a more complex issue. The balance sheets look good with $173 million in cash and short-term investments and very little long-term obligations. There's even good cash flow from operations. However, the stock already trades at 30 times analysts' full-year estimates, and Orbitz recently lowered its own Q2 guidance to below the Street's expectations.

With stiff competition from the companies mentioned above, plus burgeoning Web gorillaInterActiveCorp's (Nasdaq: IACI) Expedia, a bet on any of the lesser apes ought to rest on faith in a continued travel rebound robust enough to feed the entire pack. That's not a bet this monkey is comfortable making.

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Fool contributor Seth Jayson owns no stake in any companies mentioned above. View his Fool profile here.