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Can you believe the bargain price on Ctrip.com (NASDAQ:CTRP) these days? China's leading travel website kicked off the trading week in the teens. It's a far way to fall for a stock that topped the $70 mark just six months ago.

Sure, throw a dart at a stock listings page and you're likely to land on another Wall Street sob story. Throw a dart at a stock listings website and you're likely to need a new monitor, but that's another sob story. The difference here is that Ctrip's fall from grace is nearly entirely unwarranted.

Let's ask the easy CSI questions around the company's chalked outline:

  • Is Ctrip threatened by the global economy's tightening credit standards? No, the company closed out its latest quarter with $207 million in cash on its sparkling balance sheet.
  • Is Ctrip in a dying industry? No way. China is an emerging market, and the travel portal is there to double dip into the trends of online migration and greater demand for leisure and corporate travel in the world's most populous nation.
  • Is Ctrip failing on the bottom line? Not yet. The company has met or exceeded Wall Street's profit targets in seven consecutive quarters.

The fine line between "not" and "not yet"
Naturally the "not yet" response to the final question is a clue. The company's third quarter was accompanied with a cautious near-term outlook. Ctrip has a delicious history of underpromising and overdelivering, but analysts believe Ctrip's cautionary tone.

Since last week's quarterly report, analysts have taken down Ctrip's earnings guesstimates. Wall Street now sees the company earning $0.93 a share this year and $1.14 a share come 2009. It's a far cry from the company's headier growth rate in the past, but who is scoffing at 23% bottom line growth in this sorry climate?

Let's go over what the stateside travel portals are looking at.

Company

2008

2009

Growth

Priceline.com (NASDAQ:PCLN)

5.77

5.85

1.4%

Expedia (NASDAQ:EXPE)

1.28

1.22

(4.7%)

Orbitz Worldwide (NYSE:OWW)

(3.70)

(0.09)

n/m

 Source: Yahoo! Finance.

Orbitz is still rudderless in the red. Expedia's bottom line is inching lower. Priceline is the niche darling, but it's looking at flattish growth next year. Ctrip's 23% is looking better and better.

Value is in the eye of the shareholder
Sure, shares of domestic travel sites are also trading at ridiculous earnings multiples, but Ctrip is pretty darn cheap at this point too. The stock began the trading week trading at just 16.5 times next year's profitability target.

That's an insane price given the insane upside of China in general and Ctrip in particular.

Oh, and if it makes any difference, I'm not some fan boy with blinders when it comes to singing Ctrip's praises. I trashed the stock in my weekly "Throw This Stock Away" column back in July.

"Ctrip's valuation may be more attractive today than it was when it peaked in May, but it's still not cheap," I wrote at the time, with Ctrip shares trading for more than $42. "Ctrip is trading for nearly 40 times this year's profit target, just as growth is decelerating and analysts are gradually whittling away at their guesstimates."

I was right then about Ctrip being expensive. I am right now about Ctrip being cheap.

Stamping the passport
There are certainly other ways to play the convergence of China's booming travel industry with the online migration.

  • Smaller rival eLong (NASDAQ:LONG) isn't growing as quickly as Ctrip, but it's trading for nearly the amount of cash on its balance sheet.
  • AirMedia (NASDAQ:AMCN), a fast-growing company that runs a multimedia advertising network in China's leading airports, bucked the trend by actually raising its guidance earlier this month.
  • Value-priced hospitality chain Home Inns & Hotels (NASDAQ:HMIN) offers a real world travel play for folks who prefer a bricks and mortar play.

However, I'll stick to Ctrip here at today's bargain basement price. When you have a chance to grab a growing market leader at a discount to its depressed growth rate, you don't want to let that flight leave without you.

If you see things my way, head on over to the Motley Fool CAPS community, and give Ctrip.com an outperform rating.

Other stops on the Ctrip itinerary:

Ctrip.com International is a Motley Fool Hidden Gems pick. Priceline.com is a Motley Fool Stock Advisor recommendation. Try any of our Foolish newsletters today, free for 30 days.

Longtime Fool contributor Rick Munarriz has been a fan of China's high-margin stocks for a long time. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. He does not own shares in any of the companies in this story. The Fool has a disclosure policy.