According to the documentation for that sensor, the output is a sine wave and the voltage (amplitude) increases as the speed increases. That might make it difficult to count with the Arduino. That being said, people have been successful at reading tach signals with an Arduino, and that voltage is all over the place. The nice thing about the sensor I used is that it outputs a square wave On-Off-On-Off signal.
https://www.dakotadigital.com/pdf/SEN-01-1.pdf
https://www.dakotadigital.com/pdf/SEN-01-4280.pdf