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Castle Biosciences (CSTL)
NASDAQ:CSTL
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Castle Biosciences
(NASDAQ:CSTL)
66Neutral
Positive Factors
Market Valuation
CSTL shares trade at a significantly lower valuation compared to its clinical peers, suggesting potential undervaluation.
Revenue Growth
CSTL had a strong 2024, driving a 51% revenue growth year-over-year with impressive profitability metrics.
Negative Factors
Coverage Decision Impact
Novitas' negative DDx-SCC coverage decision means minimal reimbursement going forward.
Reimbursement Uncertainty
There is uncertainty regarding the SCC reimbursement status, which could impact CSTL's profitability.
Castle Biosciences (CSTL) vs. S&P 500 (SPY)
Market Cap
$570.85M
Dividend YieldN/A
Average Volume (3M)442.68K
Price to Earnings (P/E)32.3
Beta (1Y)0.63
Revenue Growth51.09%
EPS GrowthN/A
CountryUS
Employees761
SectorHealthcare
Sector Strength62
IndustryMedical - Diagnostics & Research
Share Statistics
EPS (TTM)0.61
Shares Outstanding28,514,109
10 Day Avg. Volume288,682
30 Day Avg. Volume442,681
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.76
Price to Cash Flow (P/CF)6.00
P/FCF Ratio6.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$39.00Price Target Upside93.16% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
Castle Biosciences Business Overview & Revenue Model
Company DescriptionCastle Biosciences, Inc., a commercial-stage diagnostics company, focuses to provide diagnostic and prognostic testing services for dermatological cancers. Its lead product is DecisionDx-Melanoma, a multi-gene expression profile (GEP) test to identify the risk of metastasis for patients diagnosed with invasive cutaneous melanoma. The company also offers DecisionDx-UM test, a proprietary GEP test that predicts the risk of metastasis for patients with uveal melanoma, a rare eye cancer; DecisionDx-SCC, a proprietary 40-gene expression profile test that uses an individual patient's tumor biology to predict individual risk of squamous cell carcinoma metastasis for patients with one or more risk factors; and DecisionDx DiffDx-Melanoma and myPath Melanoma, a proprietary GEP test to diagnose suspicious pigmented lesions. It offers test services through physicians and their patients. The company was founded in 2007 and is headquartered in Friendswood, Texas.
How the Company Makes MoneyCastle Biosciences makes money primarily through the sale of its genomic testing services. The company develops and commercializes proprietary diagnostic tests that provide critical insights for the treatment of cancers and other diseases. These tests are sold to healthcare providers, who utilize the information to tailor patient care. Revenue is generated from the fees charged for each test performed. Key revenue streams include the DecisionDx-Melanoma test, which assesses the risk of metastasis in patients with melanoma, and other similar tests that aid in the management of skin cancer and other serious conditions. Additionally, Castle Biosciences may engage in partnerships and collaborations with healthcare institutions and research organizations to expand the reach and application of its diagnostic solutions, contributing further to its revenue.
Castle Biosciences Financial Statement Overview
Summary
Castle Biosciences demonstrates substantial financial improvement across all fronts, with strong revenue growth, improved profitability, and cash flow recovery. The company's low debt levels and strong equity base provide stability, while the positive cash flow metrics underscore efficient operational management. These factors position the company well for future growth and resilience.Income Statement
Castle Biosciences shows strong revenue growth with a 51.1% increase from 2023 to 2024, indicating robust market demand. Gross Profit Margin is stable at approximately 100%, demonstrating effective cost management. Net Profit Margin improved significantly to 5.5% in 2024 from a negative margin in 2023, reflecting enhanced profitability. Both EBIT and EBITDA Margins turned positive, indicating improved operational efficiency.85
Very Positive
Balance Sheet
The company maintains a healthy Equity Ratio of 85.8%, suggesting a strong capital structure with low reliance on debt. The Debt-to-Equity Ratio is favorable at 0.06, indicating low financial leverage. Return on Equity improved to 4.0% in 2024, a positive turnaround from previous losses, showing better returns on shareholder investments.78
Positive
Cash Flow
Castle Biosciences' Free Cash Flow turned positive in 2024, indicating improved cash management and operational efficiency. The significant Free Cash Flow Growth Rate from a negative base in 2023 highlights a strong recovery. The Operating Cash Flow to Net Income Ratio is robust at 3.56, reflecting effective cash generation from operations.92
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 332.07M | 219.79M | 137.04M | 94.08M | 62.65M | Gross Profit |
| 332.07M | 174.81M | 105.03M | 78.26M | 52.96M | EBIT |
| 8.67M | -67.98M | -91.14M | -40.08M | -6.54M | EBITDA |
| 38.14M | -45.02M | -58.34M | -36.60M | -7.09M | Net Income Common Stockholders |
| 18.25M | -57.47M | -67.14M | -31.29M | -10.28M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 293.13M | 243.10M | 258.63M | 329.63M | 409.85M | Total Assets |
| 531.24M | 453.34M | 447.33M | 462.57M | 439.33M | Total Debt |
| 26.34M | 15.34M | 13.31M | 8.08M | 0.00 | Net Debt |
| -93.36M | -83.51M | -109.64M | -321.55M | -409.85M | Total Liabilities |
| 75.40M | 62.07M | 48.18M | 50.83M | 23.64M | Stockholders Equity |
| 455.83M | 391.27M | 399.15M | 411.74M | 415.69M |
| Cash Flow | Free Cash Flow | |||
| 36.54M | -19.25M | -47.29M | -22.47M | 5.11M | Operating Cash Flow |
| 64.87M | -5.63M | -41.66M | -18.98M | 9.87M | Investing Cash Flow |
| -50.14M | -16.18M | -166.54M | -66.66M | -4.75M | Financing Cash Flow |
| 6.14M | -2.30M | 1.51M | 5.42M | 305.89M |
Castle Biosciences Technical Analysis
Negative
20.19
Price Trends
23.82
Negative
26.53
Negative
26.61
Negative
Market Momentum
-1.07
Negative
36.62
Neutral
31.42
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CSTL, the sentiment is Negative. The current price of 20.19 is above the 20-day moving average (MA) of 20.03, below the 50-day MA of 23.82, and below the 200-day MA of 26.61, indicating a neutral trend. The MACD of -1.07 indicates Negative momentum. The RSI at 36.62 is Neutral, neither overbought nor oversold. The STOCH value of 31.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CSTL.
Castle Biosciences Risk Analysis
Castle Biosciences disclosed 74 risk factors in its most recent earnings report. Castle Biosciences reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Castle Biosciences Peers Comparison
Overall Rating
UnderperformOutperform
Sector (48)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $19.12B | ― | -19.42% | ― | 56.75% | 59.77% | |
66 Neutral | $570.85M | 32.27 | 4.31% | ― | 51.09% | ― | |
56 Neutral | $521.63M | ― | -3.76% | ― | -1.99% | 74.89% | |
53 Neutral | $8.07B | ― | -37.09% | ― | 10.37% | -389.98% | |
51 Neutral | $807.17M | ― | -17.15% | ― | 12.15% | 61.33% | |
49 Neutral | $5.24B | ― | -4584.47% | ― | 31.04% | 16.91% | |
48 Neutral | $6.86B | 1.11 | -50.22% | 2.47% | 16.71% | 1.53% |
* Healthcare Sector Average
Performance Comparison
CSTL
Castle Biosciences
20.19
-1.05
-4.94%
EXAS
Exact Sciences
44.56
-25.60
-36.49%
MYGN
Myriad Genetics
8.80
-11.42
-56.48%
NTRA
Natera
143.20
50.84
55.05%
FLGT
Fulgent Genetics
17.62
-3.59
-16.93%
GH
Guardant Health
43.49
25.34
139.61%
Castle Biosciences Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: -20.13% | Next Earnings Date: May 12, 2025
Earnings Call Sentiment Positive
Castle Biosciences reported strong revenue growth and profitability in 2024, with significant increases in test report volumes and cash reserves. However, the anticipated loss of Medicare coverage for DecisionDx-SCC poses a challenge, along with expected declines in the mental health segment. Despite these challenges, the company shows strong financial health and growth potential.Highlights
Strong Revenue Growth
Fourth quarter revenue was $86.3 million, a 31% increase over the fourth quarter of 2023. Full year 2024 revenue was $332.1 million, a 51% increase over 2023.
Increased Test Report Volume
Total test report volume grew by 36% in 2024 compared to 2023.
Cash and Investments Growth
As of December 31, 2024, the company's cash, cash equivalents, and marketable investment securities totaled $293.1 million, a $50 million increase over December 31, 2023.
TissueCypher Test Growth
TissueCypher test reports grew by 130% in 2024 compared to 2023, with 20,956 reports delivered.
Profitability Achieved
Net income for the full year 2024 was $18.2 million compared to a net loss of $57.5 million for 2023.
Positive Adjusted EBITDA
Adjusted EBITDA for the full year 2024 was $75 million compared to a negative $4.4 million in 2023.
Lowlights
Loss of Medicare Coverage for DecisionDx-SCC
In January 2025, Medicare noncoverage for DecisionDx-SCC was finalized, effective April 24, 2025, impacting reimbursement.
Decline in Mental Health Test Volume
IDgenetix test report volumes and net revenues are expected to continue decreasing in 2025, with long-term performance remaining uncertain.
Gross Margin Impact
With the anticipated loss of DecisionDx-SCC coverage, gross margins are expected to be in the low to mid-70% range in 2025.
Company Guidance
In the Castle Biosciences fourth quarter and full year 2024 conference call, the company reported a revenue of $86.3 million for Q4, marking a 31% increase from the previous year, and a total revenue of $332.1 million for the year, reflecting a 51% growth. The company achieved a total test report volume growth of 36% compared to 2023, with DecisionDx-Melanoma test reports increasing by 8% to 36,008, achieving an approximate 28% market penetration. DecisionDx-SCC test reports grew by 43% to 16,348, while TissueCypher test reports surged by 130% to 20,956. The company's gross margin for 2024 was 78.5%, with an adjusted gross margin of 82%. Castle Biosciences ended the year with $293.1 million in cash, cash equivalents, and marketable securities and reported a full-year net income of $18.2 million, translating to a diluted earnings per share of $0.62. For 2025, the company anticipates total revenue between $280 million and $295 million, accounting for potential loss of Medicare reimbursement for DecisionDx-SCC from April 2025.Castle Biosciences Corporate Events
Business Operations and StrategyFinancial Disclosures
Castle Biosciences Reports Strong 2024 Financial Performance
Positive
Feb 27, 2025
Castle Biosciences reported a strong financial performance for the year 2024, with a 51% increase in revenue to $332 million and a 36% rise in test report volume compared to 2023. The company achieved significant growth in its dermatologic and gastroenterology test reports, driven by the clinical value of its tests and strategic commercial execution. The company anticipates generating between $280-295 million in revenue in 2025, focusing on operational excellence and strategic opportunities to enhance stockholder value.
Business Operations and StrategyFinancial Disclosures
Castle Biosciences Projects Strong Revenue Growth for 2024
Positive
Jan 13, 2025
Castle Biosciences announced preliminary unaudited results for 2024, expecting total revenue to meet or exceed the top end of the guided range of $320-330 million, marking over 50% growth from 2023. The company delivered 96,071 total test reports in 2024, a 36% increase from the previous year, driven by various tests including DecisionDx®-Melanoma and TissueCypher® Barrett’s Esophagus. Despite the growth, a recent Medicare decision signified non-coverage for the DecisionDx-SCC test, impacting future reimbursement. The results underscore Castle Biosciences’ momentum and commitment to advancing health through patient-centric diagnostics.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.