fuboTV Inc. (NYSE:FUBO) shares have extended their recent run, gaining 35% in the last month alone. The bad news is that even after shares have recovered over the last 30 days, shareholders are still about 5.4% underwater compared to last year.

Even after such a big jump in price, fuboTV’s price-to-sales (or “P/S”) ratio of 0.4 may still be sending buy signals right now, considering that nearly half of all companies in the interactive media and services industry in the United States have P/S ratios above 1.4x, and even P/S ratios above 4x are not uncommon. However, it’s not wise to simply take the P/S at face value, as there may be an explanation for why it’s capped.

Check out our latest analysis for fuboTV

What does fuboTV’s P/S mean for shareholders?

With revenue growth that’s been better than most companies recently, fuboTV has done relatively well. One possibility is that the P/S ratio is low because investors think this strong revenue performance may be less impressive in the future. If you like the company, you hope that’s not the case so you can potentially buy some shares while it’s out of demand.

Want to know how analysts see fuboTV’s future compared to the industry? In this case, our free Report is a good starting point.

How is fuboTV’s revenue growth developing?

fuboTV’s price-to-sales ratio is typical of a company that is expected to have limited growth and is also underperforming the industry average.

First, if we look back, we can see that the company grew its revenue by an impressive 29% last year. The strong recent performance means that it has been able to achieve a total revenue increase of 266% over the last three years. So, first of all, we can see that the company has done a great job of growing revenue during this time.

According to nine analysts who cover the company, revenue is expected to grow 13% next year. The rest of the industry is forecast to grow 13%, which is not much different.

With this in mind, it is odd that fuboTV’s P/S is below that of most other companies. It may be that most investors are not convinced that the company can meet future growth expectations.

The last word

Although fuboTV’s share price has risen recently, its price-to-sales ratio still lags behind most other companies. While the price-to-sales ratio shouldn’t be the deciding factor in whether or not you buy a stock, it is a perfectly viable indicator of revenue expectations.

It looks to us like the P/S numbers for fuboTV remain low despite expected growth in line with other companies in the industry. When we see average revenue growth like this, we assume it’s the potential risks that are putting pressure on the P/S ratio. Perhaps investors are worried that the company could underperform forecasts in the near future.

Please note, however, fuboTV shows 3 warning signs in our investment analysis what you should know.

If you like strong, profitable companies, then you should check this out free List of interesting companies that trade at a low P/E ratio (but have proven that they can grow their earnings).

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