Given the troubles at Ford (NYSE:F) and GM (NYSE:GM), the auto industry isn't likely to see much growth. But DealerTrackHoldings (NASDAQ:TRAK) seems to have no such problems.

For its recently ended fourth quarter, the company posted a 75% increase in revenues, to $33.4 million. Net income dropped 89% to $682,000, or $0.02 per share, though that was partly due to the company's use of tax losses.

DealerTrack is an Internet-based network for the automotive retail industry, connecting auto dealers with banks, finance companies, and credit unions. Dealers have traditionally used faxes to manage financing, but DealerTrack lets them speed up the process, with fewer errors. The software helps manage various payment options, credit analysis, and document compliance, and provides dealers access to customer leads.

Like (NYSE:CRM), DealerTrack charges a subscription fee for its software. The company's network now connects 21,155 active dealers (a 10% increase year over year) and 201 financing sources.

Those dealers are getting plenty of use from the system. In the fourth quarter, the DealerTrack network processed 12.8 million transactions, up 53% from the year-ago period.

Its strong distribution network makes DealerTrack effective in cross-selling. The company has launched a variety of new offerings for profit management, compliance, and aftermarket products and services. The company has also been aggressive with acquisitions; it recently purchased DealerWire, which provides inventory solutions.

DealerTrack's recent IPO gave the company a cash infusion of about $100 million. But like most firms new to the market, its valuation is frothy. The company's guidance for 2006 predicts net income of $15 million to $16 million, which works out to a forward P/E of roughly 50. What's more, the company is expecting its growth rate to slow down, which is usually a bad sign for a high-multiple stock. Despite its apparently solid technology, I'd suggest that Fools give this company a thorough, cautious check under the hood.

Fool contributor Tom Taulli does not own shares mentioned in this article.