Shares of Shutterfly (Nasdaq: SFLY) hit an all-time high this morning after the photo-centric star posted better-than-expected quarterly results.

A 21% spike in orders coupled with a 5% uptick in average order value helped propel net revenue 27% higher to $166.2 million during the telltale holiday quarter. Net income soared 35% higher to $32.5 million, or $1.09 per share.

Analysts had been targeting a profit of only $0.95 a share on an 18% top-line boost.

Don't let the guidance for the current quarter -- calling for a loss with revenue clocking in at less than a third of the holiday quarter -- ruin the moment for you. This is a highly seasonal business. Shutterfly loses money in its ho-hum prints business through the first nine months of the year. The fourth-quarter push for Christmas gifts consisting of Shutterfly's signature photobooks and other personalized items always saves the year.

The meatier guidance here is for all of 2011, and it's looking pretty snappy. Earning $0.74 to $0.81 a share on $363 million to $373 million in net revenue looks great lined up next to Wall Street guesstimates of $0.67 a share on $343.4 million in revenue.

Shutterfly may be an unlikely darling in the Web-based photofinishing space. This is a niche that should have been inherited by Kodak's (NYSE: EK) Kodak Gallery, American Greetings' (NYSE: AM) Webshots, and Hewlett-Packard's (NYSE: HPQ) Snapfish. Kodak's been in the photofinishing business for decades. American Greetings knows the seasonal relevance of customized holiday greetings. HP's bread-and-butter business remains color printers.

However, just as VistaPrint (Nasdaq: VPRT) has become the sweetheart of customized business products over the office supply superstores, sometimes it takes a nimble player with a fresh visionary outlook to make it work.

Shutterfly has proven that it's no novelty act, even during the gift-giving holiday season. A full 72% of its revenue came from repeat customers. I've been a fan of Shutterfly's photobooks for years. I'm just kicking myself for not hopping on as an investor.

The only thing keeping me back now is the valuation. Shutterfly is trading at roughly 50 times the high end of its year-ahead profit target. There's also no dire rush, since investor interest is bound to wane as Shutterfly hunkers down for the next three quarterly deficits. However, the skeptics who figured Shutterfly would be shooed away by corporate giants or that photo-sharing on Facebook would diminish the need for physical prints and customized products have been proved wrong.

And not everyone thinks Shutterfly is expensive. Morgan Keegan analyst Julian Patterson upgraded the shares this morning, raising his price target from a now-obsolete $34 to a more photogenic $46.

Shutterfly is the real deal. I just wish it were cheaper.

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Longtime Fool contributor Rick Munarriz has never tried to shake it like a Polaroid picture. 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.