Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of travel website Expedia (Nasdaq: EXPE) are visiting four-year highs today, up 12% on a bumper crop of earnings, better guidance, and even a few positive comments from the analyst community.

So what: Expedia reported 23% net income growth to $0.50 per share in profit last night ($0.55 pro forma), which was several pennies more profit than Wall Street was expecting. Management thinks the good times will keep on rolling, as operating earnings rise in the "mid-to-high single-digit range" through year’s end.

Now what: The stock's selling for about 22 times earnings, of course. And yes, that looks expensive if all Expedia can manage is the 10% long-term growth that Wall Street expects of it. There a couple caveats to consider, however. First, Expedia just grew its earnings 23%, twice the pace of long-term earnings predictions. (Or did I mention that already?) Second, the $873 million in free cash flow Expedia generated over the last 12 months was nearly twice the amount of "earnings" it reported. Valued on its free cash flow, the company really only costs about 10 times FCF. Worst case, I think if Expedia meets consensus projections going forward, then the stock's fairly priced today. If Expedia can keep on beating expectations, on the other hand, the sky's the limit.

Will Expedia "keep on beating expectations? Add it to your watchlist and find out.

Fool contributor Rich Smith does not own (or short) shares of Expedia. The Motley Fool has a disclosure policy. Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.