Castle Biosciences (CSTL) AI Stock Analysis

• Market Cap: $561.02M
• Dividend Yield: N/A
• Average Volume (3M): 478.76K
• Price to Earnings (P/E): 30.6
• Beta (1Y): 1.12
• Revenue Growth: 20.40%
• EPS Growth: -165.41%
• Country: US
• Employees: 784
• Sector: Healthcare
• Sector Strength: 41
• Industry: Medical - Diagnostics & Research
• EPS (TTM): 0.15
• Shares Outstanding: 29,008,282
• 10 Day Avg. Volume: 748,432
• 30 Day Avg. Volume: 478,761
• PEG Ratio: -0.31
• Price to Book (P/B): 1.62
• Price to Sales (P/S): 2.23
• P/FCF Ratio: 20.26
• Enterprise Value/Market Cap: 0.65
• Enterprise Value/Revenue: 1.05
• Enterprise Value/Gross Profit: 1.31
• Enterprise Value/Ebitda: 14.57
• 1Y Price Target: $34.07
• Price Target Upside: 76.16% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7

• Rating: 56 Neutral
• Price Target: $20.50 ▲(6.00% Upside)

Castle Biosciences' overall score is driven by its financial performance challenges, including declining revenue growth and profitability. While the earnings call provided a positive outlook with increased revenue guidance, technical indicators suggest a bearish trend. Valuation remains a concern due to negative earnings and lack of dividends.

Positive Factors

Market Position

CSTL shares trade at a significantly lower valuation compared to its clinical peers, suggesting potential undervaluation.

Product Performance

TissueCypher is the main growth driver for CSTL, with volumes 25% above consensus expectations.

Strategic Collaboration

Castle Biosciences enters a collaboration and license agreement with SciBase Holding AB to develop a diagnostic test for atopic dermatitis.

Negative Factors

Reimbursement Uncertainty

There is uncertainty regarding the SCC reimbursement status, which could impact CSTL's profitability.

Revenue Challenges

CSTL will no longer benefit from DDx-SCC revenue.

Castle Biosciences Business Overview & Revenue Model

Company Description

Castle Biosciences, Inc. is a biotechnology company focused on improving the treatment of cancer and other diseases through innovative diagnostic tests. The company specializes in developing and commercializing genomic tests that provide physicians with critical information to guide treatment decisions for patients, particularly in the fields of dermatology and oncology. Its core products include tests for melanoma, non-melanoma skin cancer, and other cancers, enabling more personalized and effective care for patients.

How the Company Makes Money

Castle Biosciences generates revenue primarily through the sale of its diagnostic tests and associated services. The company charges healthcare providers for its genomic testing services, which are typically reimbursed by insurance companies, including Medicare and various private insurers. Key revenue streams include the sales of its flagship products such as the DecisionDx-Melanoma and DecisionDx-SCC tests, which are designed to assess the risk of cancer recurrence and guide treatment options. Additionally, Castle Biosciences has established partnerships with various healthcare organizations and research institutions to enhance its test development and market reach, further contributing to its revenue growth. Factors such as the increasing demand for personalized medicine and advancements in genomic testing technology also play a significant role in the company's earnings.

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.

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.

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	346.27M	332.07M	219.79M	137.04M	94.08M	62.65M
Gross Profit	277.96M	271.86M	174.81M	105.03M	78.26M	52.96M
EBITDA	25.03M	38.14M	-45.02M	-58.34M	-36.60M	-7.09M
Net Income	-9.47M	18.25M	-57.47M	-67.14M	-31.29M	-10.28M
Balance Sheet
Total Assets	544.73M	531.24M	453.34M	447.33M	462.57M	439.33M
Cash, Cash Equivalents and Short-Term Investments	275.93M	293.13M	243.10M	258.63M	329.63M	409.85M
Total Debt	37.35M	26.34M	15.34M	13.31M	8.08M	0.00
Total Liabilities	89.35M	75.40M	62.07M	48.18M	50.83M	23.64M
Stockholders Equity	455.38M	455.83M	391.27M	399.15M	411.74M	415.69M
Cash Flow
Free Cash Flow	34.54M	36.54M	-19.25M	-47.29M	-22.47M	5.11M
Operating Cash Flow	62.49M	64.87M	-5.63M	-41.66M	-18.98M	9.87M
Investing Cash Flow	-59.83M	-50.14M	-16.18M	-166.54M	-66.66M	-4.75M
Financing Cash Flow	-6.00M	6.14M	-2.30M	1.51M	5.42M	305.89M

Castle Biosciences Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 19.34
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CSTL, the sentiment is Positive. The current price of 19.34 is above the 20-day moving average (MA) of 17.35, above the 50-day MA of 18.35, and below the 200-day MA of 23.10, indicating a neutral trend. The MACD of 0.33 indicates Negative momentum. The RSI at 58.62 is Neutral, neither overbought nor oversold. The STOCH value of 69.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CSTL.

Castle Biosciences Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FLGT	60 Neutral	$643.10M	―	-4.54%	―	4.31%	69.57%
GRAL	59 Neutral	$1.21B	―	-17.68%	―	22.37%	86.08%
CSTL	56 Neutral	$561.02M	30.59	-2.15%	―	20.40%	-165.41%
MYGN	56 Neutral	$561.06M	―	-70.03%	―	3.83%	-137.31%
LAB	51 Neutral	$497.57M	―	-22.40%	―	13.17%	64.50%
Sector *	51 Neutral	$7.43B	-0.36	-45.45%	2.27%	22.98%	-2.34%
PSNL	47 Neutral	$405.25M	―	-60.26%	―	0.36%	22.13%

Castle Biosciences Corporate Events

Castle Biosciences Updates Bylaws for Improved Governance

On August 5, 2025, Castle Biosciences, Inc. adopted amended and restated bylaws, introducing several changes to enhance governance and operational clarity. These changes include revisions to stockholder meeting procedures, nomination processes, and director and officer indemnification, potentially impacting the company’s governance structure and stakeholder interactions.

The most recent analyst rating on (CSTL) stock is a Buy with a $35.00 price target. To see the full list of analyst forecasts on Castle Biosciences stock, see the CSTL Stock Forecast page.

Castle Biosciences Reports Strong Q2 2025 Financial Results

On August 4, 2025, Castle Biosciences reported its second-quarter financial results, highlighting a revenue of $86 million and a 33% increase in total test reports for its core products compared to the previous year. Despite challenges such as the Novitas LCD affecting certain test coverages and the discontinuation of IDgenetix, the company raised its full-year revenue guidance to $310-320 million. The company also announced strategic moves including a tuck-in acquisition and a collaboration with SciBase, aiming to support long-term value creation. Additionally, the DecisionDx-Melanoma test received Breakthrough Device designation from the FDA, with studies showing a 32% reduction in mortality risk for patients using the test.

The most recent analyst rating on (CSTL) stock is a Buy with a $34.00 price target. To see the full list of analyst forecasts on Castle Biosciences stock, see the CSTL Stock Forecast page.

Castle Biosciences Holds Annual Stockholders Meeting

On May 22, 2025, Castle Biosciences held its annual meeting of stockholders, where key decisions were made. Stockholders elected three Class III Directors to serve until 2028, ratified KPMG LLP as the independent accounting firm for 2025, approved executive compensation, and amended the company’s certificate of incorporation to limit officer liability. These decisions reflect the company’s ongoing efforts to strengthen governance and operational frameworks.

The most recent analyst rating on (CSTL) stock is a Buy with a $34.00 price target. To see the full list of analyst forecasts on Castle Biosciences stock, see the CSTL Stock Forecast page.