Investors rarely get excited about an automobile-related company, which makes yesterday's 13% stock surge for DealerTrack (NYSE:TRAK) especially surprising. The company continues to enhance its electronic network for auto dealers while finding new ways to monetize its offerings.

Fourth-quarter revenues increased 37% to $45.7 million, with net income increasing from $700,000, or $0.02 per share, to $5.7 million, or $0.14 per share. DealerTrack's $14.5 million in EBITDA (earnings before interest, taxes, depreciation, and amortization) displays the business's strong leverage.

DealerTrack's core business helps auto dealers cost-effectively obtain auto loans, providing tools for submitting credit applications and access to hundreds of lenders. Its network currently includes 22,147 dealers, who pay for DealerTrack's services via transaction fees or subscriptions.

Adding new services is crucial to DealerTrack's growth strategy. It's recently rolled out new features such as lead management, customer identity verification, and electronic contracts. The latest add-on service, InventoryPro, looks especially promising, using sales history and market data to help auto dealers improve inventory turnover. Inventory issues have become one of dealers' biggest hassles, especially amid recent weak sales from major automakers like Ford (NYSE:F), GM (NYSE:GM), and DaimlerChrysler AG (NYSE:DCX).

Promising products aside, does DealerTrack's valuation match its prospects? Management expects revenue of $219 million to $221 million for 2007, which means the company is selling at about 5.4 times forward revenue. That looks expensive, unless you factor in DealerTrack's history of strong growth. Like and other standout tech companies, premium valuations seem inevitable for fast-growing firms like DealerTrack.

We've been driven to further Foolishness:

Fool contributor Tom Taulli, author of The Complete M&A Handbook, does not own shares mentioned in this article. He is currently ranked 2,176 out of 23,644 in CAPS. The Fool has a disclosure policy.