It's time to start respecting Travelzoo (NASDAQ:TZOO). The website operator behind the popular Top 20 weekly travel deal emails came through with another strong quarter.

Revenue in its latest quarter soared 21% to $23.8 million. Analysts were expecting a more modest 4% top-line advance. Earnings clocked in at a whopping $0.53 a share, but that also includes a beefy gain on the sale of its Asian operations. Earnings from continuing operations were $0.09 a share, short of the $0.11 a share it rang up a year ago -- but investors need to dig deeper here.

Travelzoo has been investing in its European expansion for five years, but those efforts have yet to pay off on the bottom line. The dot-com's $1.8 million operating loss in Europe eats into its $5.3 million stateside operating profit.

The sting gets worse when you consider that the company can't use losses abroad to offset the tax bite on its domestic profits. In other words, it has to set aside nearly $2 million for Uncle Sam on its domestic profit, even if that ultimately translates into a bizarre effective tax rate of 57% on its $3.5 million in pre-tax profits.

The foreign exposure can also be feast or famine when it comes to foreign currency swings, and this past quarter found Travelzoo taking a small hit there. In other words, its $0.09-a-share profit is understated in several ways. Operating income from continuing operations actually soared 47% during the period.

Let's take this one step further. With its stock in the pre-teens, and trailing earnings from continuing operations of $0.39 a share, the stock's valuation may seem steep by conventional standards. However, Travelzoo has delivered $19.2 million in North American operating profits over the past four quarters. If we taxed that at a 35% rate, Travelzoo would have earned $0.76 a share -- or a reasonable 16 times trailing earnings.

Just imagine what Travelzoo will look like when its European operations either turn the profitability corner, or are sold off like its Asian money drain was.

Travelzoo is unique in the travel industry. Expedia (NASDAQ:EXPE), priceline.com (NASDAQ:PCLN), and Orbitz Worldwide (NYSE:OWW) -- as well as China's Ctrip.com (NASDAQ:CTRP) and eLong (NASDAQ:LONG) -- are traditional portals. Travelzoo is a deal publisher, distributing sponsored travel deals to its growing base of 16.8 million subscribers (up 25% over the past year).

Travelzoo launched its Fly.com meta-search portal last year, and it's looking to expand into related entertainment fields -- like pitching Broadway-show tickets to folks booking New York City treks -- but it's primarily a publisher.

I've had my concerns in the past about Travelzoo's moat. I figured it would dry up when priceline.com rolled out its PriceBreakers weekly emails three years ago. Travelzoo was sending its missives to more than 10 million subscribers at that point, so clearly, it has found a way to become even more relevant, despite its copycats.

Between the misunderstood income statements, and the upside potential once Europe earns its keep, Travelzoo is a growth-stock gem that's worth the trek.

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Longtime Fool contributor Rick Munarriz has been inspired by a deal or two on the Travelzoo Top 20 list but he does not own shares in any of the companies mentioned in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.