With its decidedly old-technology name, education software provider Blackboard (NASDAQ:BBBB) is anything but old-fashioned. Formed in 1997, the company's June IPO was hot. Sold at $14 a share, the stock opened at $15.80, hit an all-time high of $23.40, and closed at $20.10 a share. Wow, what a day!

Selling for $17 a share today, Blackboard just chalked up another good quarter. Revenue increased 16% and earnings jumped almost sixfold (and beat analyst estimates by a penny a share). Based on the company's 2004 earnings guidance, the stock is selling for an eye-catching 53 times earnings.

Product revenue (86%) comes from two software products. The Academic Suite powers everything required for Web-based learning. The Commerce Suite allows university ID cards to double as debit cards for on- and off-campus transactions.

Blackboard is in the process of moving beyond reaping the rewards to actually gaining critical mass. While sales are not booming, earnings are. Analysts expect 2005 earnings to double, while revenues increase in the mid-teens -- giving the stock a 28 forward price-to-earnings ratio.

The outlook is promising, too. Besides international expansion, there is plenty of room for U.S. growth -- and to develop new product suites.

Blackboard has $86 million in cash and no debt. While similar-sized competitor eCollege (NASDAQ:ECLG) sells for 22 times 2005 earnings, its net debt of $20 million explains its less-than-premium pricing. Tiny competitor vCampus (NASDAQ:VCMP) is still struggling to make a profit.

Blackboard sells for 4.4 times sales -- more than twice industry standards but far below the 6.7 and 8.6 times, respectively, that industry giants Oracle (NASDAQ:ORCL) and Microsoft (NASDAQ:MSFT) command. While the company's sales and margins are expanding, the current market valuation looks right on target. List the pluses and minuses on your blackboard, and see whether you agree.

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Fool contributor W.D. Crotty does not own stock in any of the companies mentioned.