European Internet provider T-Online today posted a profit in its key German market three quarters ahead of plan as it wound up unprofitable flat-rate deals, sending its shares surging.
Third-quarter earnings before interest, taxes, depreciation and amortisation (EBITDA) in the domestic market rose to € 900,000 after a €26.6 million loss in the previous quarter.
Its shares jumped over 10 per cent to €12.49 today, implying a market value of €15.3 billion.
But analysts cautioned the share was looking expensive after tripling in value since September, when it reached €4.85 in the aftermath of the September 11th attacks in the US.
"T-Online is trading at an unjustified valuation premium compared with its European peers," said Ms Melissa Earlam, an analyst at UBS Warburg in London.
She noted that although T-Online's core enterprise value was 6.5 times 2002 sales, France Telecom's Wanadoo was only at 3.6 times sales and Telefonica's TerraLycos was at four times sales.
"T-Online's problem is that its valuation is even larger than Yahoo!'s $10 billion, and Yahoo! is the leader in a much bigger market," said fund manager Mr Victor Moftakhar.