Investors have certainly beamed Priceline ( PCLN) up this year.

Shares in the William Shatner-fronted online travel company have surged, in spite of renewed terror threats and fears that the economy is slowing. While rival Expedia ( EXPE) has lost a third of its value after repeated earnings setbacks, solid performer Priceline has soared 46%.

Now, while the government warns fliers against carrying liquids in their carry-on baggage, investors are hoping Priceline can keep surfing the discount-travel wave.

"We continue to believe Priceline is well-positioned in the online travel industry and expect it to maintain the highest growth rate in the industry for the foreseeable future," writes Stifel Nicolaus analyst Scott Devitt in a note to clients this week.

The going has been a bit rough of late. Priceline shares sank 3% Wednesday after Devitt cut his rating to hold from buy on valuation concerns. "We would become interested in the shares again in the upper-$20s," he said. Priceline closed Wednesday at $31.26.

Priceline wasn't the only travel stock to get hammered Wednesday. Expedia dropped 1.4%, and online publisher Travelzoo ( TZOO), another solid performer this year with a 42% gain, dropped 11%.

Priceline, which gained its notoriety by letting people name their own price, now sells the same airfare, hotel rooms and rental cars for published prices. Consumers have responded well to the fixed-price offerings, sending gross travel bookings up 62% in the last quarter. Priceline also is benefiting from two well-timed acquisitions in Europe, a market that some observers say is underpenetrated for Internet travel.

One of the main concerns that Wall Street has with the online travel industry is the growing competition between travel suppliers and travel agencies such as Expedia. Priceline has sidestepped this issue by avoiding any direct references to its suppliers in its advertisements.

And it's anyone's guess whether Priceline, which at one time was considered a casualty of the late '90s dot-com bust, will continue to outperform larger Internet names like Google ( GOOG), Yahoo! ( YHOO) and eBay ( EBAY).

About 15.9 million shares, or 7% of Priceline's float, are held by short-sellers, who profit when a stock declines. Analysts have an average price target on the stock of about $33, according to Thomson Financial. Six out of the 14 analysts who cover the stock consider it a buy, with the rest rating it a hold. Their reluctance about Priceline may be understandable.

Leisure and unplanned business spending is expected to rise 20% to $78.8 billion this year. That's down from 26% growth last year, according to the travel research firm PhoCusWright, a travel industry research firm. The firm also expects a growing number of consumers to bypass travel sites entirely and make their purchases directly from suppliers.

But Wall Street's cold shoulder to online travel may be warming, thanks to Priceline. Even rival Expedia, which six analysts have downgraded this year, is showing signs of life. Its shares have jumped about 11% since June, helped by a better-than-expected second-quarter earnings report.