Blade Air Mobility, Inc.'s (NASDAQ:BLDE) Share Price Matching Investor Opinion

When you see that almost half of the companies in the Airlines industry in the United States have price-to-sales ratios (or "P/S") below 0.4x, Blade Air Mobility, Inc. (NASDAQ:BLDE) looks to be giving off some sell signals with its 1.1x P/S ratio. Although, it's not wise to just take the P/S at face value as there may be an explanation why it's as high as it is.

View 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. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.

If you'd like to see what analysts are forecasting going forward, you should check out our free report on Blade Air Mobility.

Is There Enough Revenue Growth Forecasted For Blade Air Mobility?

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

Retrospectively, the last year delivered an exceptional 63% gain to the company's top line. Spectacularly, three year revenue growth has ballooned by several orders of magnitude, thanks in part to the last 12 months of revenue growth. So we can start by confirming that the company has done a tremendous job of growing revenue over that time.

Turning to the outlook, the next three years should generate growth of 15% each year as estimated by the five analysts watching the company. With the industry only predicted to deliver 4.2% each year, the company is positioned for a stronger revenue result.

With this in mind, it's not hard to understand why Blade Air Mobility's P/S is high relative to its industry peers. Apparently shareholders aren't keen to offload something that is potentially eyeing a more prosperous future.

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

Generally, our preference is to limit the use of the price-to-sales ratio to establishing what the market thinks about the overall health of a company.

We've established that Blade Air Mobility maintains its high P/S on the strength of its forecasted revenue growth being higher than the the rest of the Airlines industry, as expected. 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.

And what about other risks? Every company has them, and we've spotted 4 warning signs for Blade Air Mobility you should know about.

If these risks are making you reconsider your opinion on Blade Air Mobility, explore our interactive list of high quality stocks to get an idea of what else is out there.

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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.