Tutor Perini Corporation (NYSE:TPC) shares have continued their recent momentum with a 26% gain in the last month alone. The annual gain comes to 242% following the latest surge, making investors sit up and take notice.

Although its price has surged higher, it would still be understandable if you think Tutor Perini is a stock with good investment prospects with a price-to-sales ratios (or "P/S") of 0.2x, considering almost half the companies in the United States' Construction industry have P/S ratios above 0.9x. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the reduced P/S.

How Has Tutor Perini Performed Recently?

Recent revenue growth for Tutor Perini has been in line with the industry. It might be that many expect the mediocre revenue performance to degrade, which has repressed the P/S ratio. If not, then existing shareholders have reason to be optimistic about the future direction of the share price.

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

How Is Tutor Perini's Revenue Growth Trending?

The only time you'd be truly comfortable seeing a P/S as low as Tutor Perini's is when the company's growth is on track to lag the industry.

Retrospectively, the last year delivered a decent 15% gain to the company's revenues. However, this wasn't enough as the latest three year period has seen an unpleasant 21% overall drop in revenue. So unfortunately, we have to acknowledge that the company has not done a great job of growing revenue over that time.

Looking ahead now, revenue is anticipated to climb by 12% during the coming year according to the dual analysts following the company. That's shaping up to be similar to the 9.8% growth forecast for the broader industry.

With this in consideration, we find it intriguing that Tutor Perini's P/S is lagging behind its industry peers. It may be that most investors are not convinced the company can achieve future growth expectations.

What Does Tutor Perini's P/S Mean For Investors?

The latest share price surge wasn't enough to lift Tutor Perini's P/S close to the industry median. 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.

We've seen that Tutor Perini currently trades on a lower than expected P/S since its forecast growth is in line with the wider industry. When we see middle-of-the-road revenue growth like this, we assume it must be the potential risks that are what is placing pressure on the P/S ratio. It appears some are indeed anticipating revenue instability, because these conditions should normally provide more support to the share price.

It's always necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Tutor Perini, and understanding them should be part of your investment process.

If these risks are making you reconsider your opinion on Tutor Perini, 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.