After three torturous years of selling, investors are once more buying JetBlue Airways (Nasdaq: JBLU). Shares of the discount carrier rallied more than 10% on Wednesday.

Given the airline industry's history of capital destruction, you've got to wonder if today's buyers are setting themselves up to become bagholders in the next year or so. Still, the numbers speak well for JetBlue:






$1,030 million

$1,030 million

$854 million

Per-share earnings




Gross margin

Not available



Free cash flow

Not available

Not available (Boooo!)

$82 million

Sources: Yahoo! Finance and Capital IQ, a division of Standard & Poor's.

Some of these gains appear to be attributable to industrywide gains. For example, peers US Airways (NYSE: LCC) and Hawaiian Airlines parent Hawaiian Holdings (NYSE: HA) also impressed in their earnings reports this week. Hawaiian, in particular, enjoyed a rally about as large as JetBlue's.

What makes the surge really interesting is the carrier's valuation. According to Capital IQ, JetBlue ended yesterday trading for 11 times Wall Street's average 2011 profit estimate. That's too little a premium to the 9.75% annual earnings improvement that analysts expect from JetBlue over the long term. As such, I've rated the stock to outperform in my Motley Fool CAPS portfolio.

Now it's your turn to weigh in. Do you like JetBlue at current prices? Please vote in the poll below and then leave a comment to explain your thinking.