High rollers keep turning to high-end jewelry retailer Blue Nile (NASDAQ:NILE). It's a shame that analysts have chosen to stay so far away. Wall Street has missed the boat, underestimating Blue Nile's earnings in all but one quarter since the e-tailer went public three years ago.

The pros came up short again last night. Blue Nile grew net sales by 34% to $67.9 million. Earnings per share soared 46% to $0.19, on the strength of widening margins and an aggressive share-buyback program that has reduced shares outstanding by 9% over the past year. Analysts expected $0.15 a share on $62.1 million in net sales.

Blue Nile's used to leaving analysts in the dust, but this time, it's personal. The company took Wall Street to task for its ambitious second-quarter forecasts, which call for Blue Nile to earn $0.18 a share on $66.8 million in net sales. Blue Nile points out that, with the exception of 2006, it has posted a top-line sequential dip between its first and second quarters. It's a seasonality thing, and the company is perplexed at how pros predicted such lofty revenue instead. Last year's second quarter got a boost from unique diamond-pricing strategy initiatives, which won't be a factor this time around.

That leaves Blue Nile in an odd place -- talking down Wall Street's second-quarter estimates while boosting its own full-year guidance. The company now expects to earn between $0.86 and $0.91 a share in 2007, including a $0.24 per share hit in stock-based compensation. It's also estimating net sales between $295 million and $305 million.

Blue Nile is doing things right. With an average selling price of $1,536, it's immune to the mainstream bargain-hunters who flock to discounters like Wal-Mart (NYSE:WMT) offline and Amazon.com (NASDAQ:AMZN), eBay (NASDAQ:EBAY), or Overstock (NASDAQ:OSTK) online. The higher its ticket prices get, the faster it grows, having registered an 84% surge in orders in excess of $25,000. Seven of those orders topped the $100,000 mark, including a ring purchase that sent the company's cumulative net sales above the $1 billion mark for its eight-year history.

The trend toward free-spenders should also bode well for old school high-end jewelers like Tiffany's (NYSE:TIF) and Birks & Mayors (AMEX:BMJ). However, the real story here is that more shoppers are trusting Blue Nile in cyberspace with their significant orders. Repeat customer orders are actually growing faster than net sales at the company.

Don't feel bad, Wall Street. You're only human, even if you got it wrong in both directions. Heck, you make enough money -- go chase away those blues with a huge diamond ring from Blue Nile.

Blue Nile has been recommended to both Rule Breakers newsletter readers and subscribers of Hidden Gems. Amazon and eBay are active Stock Advisor picks, while Wal-Mart is an Inside Value staple. Try any of our Foolish newsletters free for 30 days.

Longtime Fool contributor Rick Munarriz proposed to his eventual wife 17 years ago, before the Internet hit the big time. If the situation were to arise today, he'd have no problem turning to Blue Nile. 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.