Satellogic Inc. (NASDAQ:SATL) shares have had a really impressive month, gaining 26% after a shaky period beforehand. The annual gain comes to 138% following the latest surge, making investors sit up and take notice.

Since its price has surged higher, you could be forgiven for thinking Satellogic is a stock to steer clear of with a price-to-sales ratios (or "P/S") of 26.5x, considering almost half the companies in the United States' Aerospace & Defense industry have P/S ratios below 2.2x. Although, it's not wise to just take the P/S at face value as there may be an explanation why it's so lofty.

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Check out our latest analysis for Satellogic

What Does Satellogic's Recent Performance Look Like?

Revenue has risen firmly for Satellogic recently, which is pleasing to see. Perhaps the market is expecting this decent revenue performance to beat out the industry over the near term, which has kept the P/S propped up. If not, then existing shareholders may be a little nervous about the viability of the share price.

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How Is Satellogic's Revenue Growth Trending?

In order to justify its P/S ratio, Satellogic would need to produce outstanding growth that's well in excess of the industry.

Retrospectively, the last year delivered an exceptional 28% gain to the company's top line. The latest three year period has also seen an excellent 203% overall rise in revenue, aided by its short-term performance. Accordingly, shareholders would have definitely welcomed those medium-term rates of revenue growth.

Comparing that to the industry, which is only predicted to deliver 6.3% growth in the next 12 months, the company's momentum is stronger based on recent medium-term annualised revenue results.

In light of this, it's understandable that Satellogic's P/S sits above the majority of other companies. It seems most investors are expecting this strong growth to continue and are willing to pay more for the stock.

What We Can Learn From Satellogic's P/S?

Satellogic's P/S has grown nicely over the last month thanks to a handy boost in the share price. Typically, we'd caution against reading too much into price-to-sales ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.

It's no surprise that Satellogic can support its high P/S given the strong revenue growth its experienced over the last three-year is superior to the current industry outlook. In the eyes of shareholders, the probability of a continued growth trajectory is great enough to prevent the P/S from pulling back. Barring any significant changes to the company's ability to make money, the share price should continue to be propped up.

There are also other vital risk factors to consider before investing and we've discovered 4 warning signs for Satellogic that you should be aware of.

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