Blade Air Mobility, Inc.'s (NASDAQ:BLDE) 26% Jump Shows Its Popularity With Investors

Blade Air Mobility, Inc. (NASDAQ:BLDE) shareholders would be excited to see that the share price has had a great month, posting a 26% gain and recovering from prior weakness. Unfortunately, the gains of the last month did little to right the losses of the last year with the stock still down 11% over that time.

Since its price has surged higher, when almost half of the companies in the United States' Airlines industry have price-to-sales ratios (or "P/S") below 0.6x, you may consider Blade Air Mobility as a stock probably not worth researching with its 1.8x P/S ratio. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the elevated P/S.

See our latest analysis for Blade Air Mobility

What Does Blade Air Mobility's P/S Mean For Shareholders?

With revenue growth that's superior to most other companies of late, Blade Air Mobility has been doing relatively well. It seems the market expects this form will continue into the future, hence the elevated P/S ratio. If not, then existing shareholders might be a little nervous about the viability of the share price.

Keen to find out how analysts think Blade Air Mobility's future stacks up against the industry? In that case, our free report is a great place to start.

How Is Blade Air Mobility's Revenue Growth Trending?

In order to justify its P/S ratio, Blade Air Mobility would need to produce impressive growth in excess of the industry.

Taking a look back first, we see that the company grew revenue by an impressive 95% last year. The latest three year period has also seen an incredible overall rise in revenue, aided by its incredible short-term performance. Accordingly, shareholders would have been over the moon with those medium-term rates of revenue growth.

Looking ahead now, revenue is anticipated to climb by 31% per year during the coming three years according to the five analysts following the company. With the industry only predicted to deliver 5.6% per annum, the company is positioned for a stronger revenue result.

In light of this, it's understandable that Blade Air Mobility's P/S sits above the majority of other companies. Apparently shareholders aren't keen to offload something that is potentially eyeing a more prosperous future.

The Key Takeaway

Blade Air Mobility's P/S is on the rise since its shares have risen strongly. While the price-to-sales ratio shouldn't be the defining factor in whether you buy a stock or not, it's quite a capable barometer of revenue expectations.

As we suspected, our examination of Blade Air Mobility's analyst forecasts revealed that its superior revenue outlook is contributing to its high P/S. Right now shareholders are comfortable with the P/S as they are quite confident future revenues aren't under threat. Unless these conditions change, they will continue to provide strong support to the share price.

Before you take the next step, you should know about the 2 warning signs for Blade Air Mobility that we have uncovered.

If strong companies turning a profit tickle your fancy, then you'll want to check out this free list of interesting companies that trade on a low P/E (but have proven they can grow earnings).

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.