Agenus Inc. (NASDAQ:AGEN) shares have had a really impressive month, gaining 30% after a shaky period beforehand. But the last month did very little to improve the 58% share price decline over the last year.

In spite of the firm bounce in price, Agenus may still be sending very bullish signals at the moment with its price-to-sales (or "P/S") ratio of 1.8x, since almost half of all companies in the Biotechs industry in the United States have P/S ratios greater than 13.9x and even P/S higher than 65x are not unusual. However, the P/S might be quite low for a reason and it requires further investigation to determine if it's justified.

How Has Agenus Performed Recently?

With revenue growth that's inferior to most other companies of late, Agenus has been relatively sluggish. Perhaps the market is expecting the current trend of poor revenue growth to continue, which has kept the P/S suppressed. If you still like the company, you'd be hoping revenue doesn't get any worse and that you could pick up some stock while it's out of favour.

How Is Agenus' Revenue Growth Trending?

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

If we review the last year of revenue growth, the company posted a terrific increase of 59%. Pleasingly, revenue has also lifted 77% in aggregate from three years ago, thanks to the last 12 months of growth. Therefore, it's fair to say the revenue growth recently has been superb for the company.

Turning to the outlook, the next three years should generate growth of 21% per year as estimated by the five analysts watching the company. Meanwhile, the rest of the industry is forecast to expand by 158% per year, which is noticeably more attractive.

With this information, we can see why Agenus is trading at a P/S lower than the industry. It seems most investors are expecting to see limited future growth and are only willing to pay a reduced amount for the stock.

The Bottom Line On Agenus' P/S

Shares in Agenus have risen appreciably however, its P/S is still subdued. 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.

As we suspected, our examination of Agenus' analyst forecasts revealed that its inferior revenue outlook is contributing to its low P/S. Right now shareholders are accepting the low P/S as they concede future revenue probably won't provide any pleasant surprises. The company will need a change of fortune to justify the P/S rising higher in the future.

Plus, you should also learn about these 5 warning signs we've spotted with Agenus (including 2 which can't be ignored).

If you're unsure about the strength of Agenus' business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.

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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.