Shares of pizza purveyor Papa John's International (NASDAQ:PZZA) jumped nearly 10% yesterday following the company's Tuesday night release of a solid Q3 income statement. Revenue growth of just under 4% brought the company's sales to $228 million, while net income nearly doubled to $7.9 million from $3.5 million a year ago. Domestic same-store sales, meanwhile, improved 1.2%, though they fell slightly in October to close out the month.

The numbers aren't mind-blowing, especially when you take into account the slim same-store sales growth figures. Management has attributed most of its revenue growth so far this year to the consolidation of franchise restaurants and promotional activity associated with the NCAA basketball tournament. But investors have nevertheless been encouraged in recent months: The shares, at $34.50 to end Wednesday's session, are nearing 52-week highs and are well up from August lows around $28.

Management has been optimistic too, as it has continued to buy back shares and has -- in the short term, anyway -- been rewarded with both appreciation and EPS growth. Back in August, I thought shares of Papa John's, a respected (if troubled) company in a competitive business that pits it against Domino's (NYSE:DPZ), Yum! Brands' (NYSE:YUM) Pizza Hut, and thousands of others, looked interesting at prices below $30. Investors have apparently taken that to heart even as the company has moderated earnings expectations for 2004.

The trouble for investors now looking in from the outside is that while the company has hardly put its challenges behind it in the last few months, the market seems to have taken a few coupons off the table. It's looking at year-over-year EPS growth of roughly 18%, and following yesterday's move it's headed back toward a full, if not rich, valuation -- reducing an investor's margin for error. Investors already in the shares, however, must be heartened at the market's willingness to support the company of late.

Fool contributor Dave Marino-Nachison doesn't own any of the companies in this story.