THE numbers are all good for, which has upgraded its profit forecast to A$42m this financial year, though one analyst from Linwar Securities, James Bales, reckons its shares are exorbitant at a price earnings ratio (share price divided by most recent earnings) of around 21. I’m not so sure, given the virtual monopoly it has an online accommodation and the PE ratios currently accorded to other travel companies.

For example, Qantas, facing a mountain of competition and issues, is far more expensive, trading on an extremely aggressive PE of 32. Meanwhile, the market is valuing online retailer Webjet and traditional agency giant Flight Centre the same with a PE of around 12. Interesting – which one is correct? Meanwhile, Jetset is trading at a miserable 4x earnings, while Virgin Blue doesn’t even have one. Something to do with earnings I guess.

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