In a report released on February 28, Puneet Souda from Leerink Partners maintained a Buy rating on Castle Biosciences (CSTL – Research Report), with a price target of $40.00.
Puneet Souda’s rating is based on the promising outlook of Castle Biosciences, particularly driven by the growth potential of their TissueCypher product. The company has expanded its sales force and is seeing significant growth in non-dermatological test revenue, with TissueCypher showing a 94% increase in volume and a notable presence in the market. This product is expected to benefit from its inclusion in the American Gastroenterological Association guidelines, which enhances its credibility and adoption.
Despite some challenges with other products like DDx-SCC and IDGenetix, Castle Biosciences is expected to maintain strong gross margins and cash flow profitability. The company has also set a 2025 guidance that slightly exceeds market expectations, suggesting confidence in their strategic direction and market opportunities. These factors contribute to a positive outlook, justifying the Buy rating.
In another report released on February 28, Robert W. Baird also maintained a Buy rating on the stock with a $37.00 price target.