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Castle Biosciences
(NASDAQ:CSTL)
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Rating:71Outperform
Price Target:
$34.00
▲(37.76% Upside)
Action:Upgraded
Date:08/05/26
CSTL scores well on fundamentals and outlook: strong revenue/volume momentum, improved cash generation, and a low-leverage balance sheet are reinforced by an earnings call featuring raised 2026 guidance and expected positive adjusted EBITDA. The score is tempered by uneven GAAP profitability (recent losses), technically overbought conditions that raise near-term volatility risk, and limited valuation support due to a negative P/E and no dividend.
Positive Factors
Sustained Revenue & Volume Momentum
Consistent top-line growth and a guidance raise signal persistent adoption of Castle’s tests across clinicians. Durable revenue and 32% core test volume growth support scale economics, fund evidence generation and commercial expansion, and underpin multi-quarter cash generation and reinvestment capacity.
Negative Factors
Inconsistent GAAP Profitability
Reversion to GAAP losses in 2025 and TTM highlights uneven operating leverage despite revenue growth. Persistent negative net income can depress returns on equity, constrain discretionary spending over time, and make sustained GAAP profitability dependent on margin recovery and disciplined expense control.
Read all positive and negative factors
Positive Factors
Negative Factors
Sustained Revenue & Volume Momentum
Consistent top-line growth and a guidance raise signal persistent adoption of Castle’s tests across clinicians. Durable revenue and 32% core test volume growth support scale economics, fund evidence generation and commercial expansion, and underpin multi-quarter cash generation and reinvestment capacity.
Read all positive factors
Castle Biosciences Key Performance Indicators (KPIs)
Any
Net Revenue by Segment
Shows how much money each part of the business brings in — for Castle Biosciences that typically means different diagnostic tests, services, and regions. Reveals whether growth is coming from a single flagship test or from broader product adoption, highlights concentration risk if one segment dominates, and points to where reimbursement, pricing, or commercial efforts are succeeding or need more investment.
Shows how much money each part of the business brings in — for Castle Biosciences that typically means different diagnostic tests, services, and regions. Reveals whether growth is coming from a single flagship test or from broader product adoption, highlights concentration risk if one segment dominates, and points to where reimbursement, pricing, or commercial efforts are succeeding or need more investment.
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The Fly
The FlyCastle Biosciences (CSTL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$855.39M
Dividend YieldN/A
Average Volume (3M)337.72K
Price to Earnings (P/E)―
Beta (1Y)0.50
Revenue Growth3.18%
EPS Growth-100.37%
CountryUS
Employees883
SectorHealthcare
Sector Strength45
IndustryMedical - Diagnostics & Research
Share Statistics
EPS (TTM)-0.66
Shares Outstanding30,549,507
10 Day Avg. Volume322,460
30 Day Avg. Volume337,724
Financial Highlights & Ratios
PEG Ratio0.21
Price to Book (P/B)2.39
Price to Sales (P/S)3.28
P/FCF Ratio39.81
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda>-0.01
Forecast
1Y Price Target
$42.71Price Target Upside73.07% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
EPS Forecast (FY)-1.45
Revenue Forecast (FY)$352.38M
Castle Biosciences Business Overview & Revenue Model
Company Description
Castle Biosciences, Inc. functions as a commercial-stage diagnostics firm, with its primary objective being the provision of both diagnostic and prognostic testing services, specifically targeting various dermatological cancers. Their flagship pro...
How the Company Makes Money
Castle Biosciences primarily makes money by providing proprietary diagnostic tests performed in its laboratories and billing for those tests. Its key revenue stream is test service revenue generated when a clinician orders a Castle test for a pati...
Castle Biosciences Earnings Call Summary
Earnings Call Date:Jul 30, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Mar 04, 2027
Earnings Call Sentiment Positive
The call presents strong operational momentum: revenue and core test volumes grew materially (20% total revenue growth, 32% core volume growth), TissueCypher delivered robust 63% YoY growth and management raised full‑year guidance. The company is investing to scale commercial reach, evidence generation and lab capacity and reports positive adjusted EBITDA and a healthy cash position. Key challenges include margin compression, higher operating expenses that produced a small GAAP net loss in the quarter, uncertainty around Medicare coverage for SCC, and near‑term sales force tradeoffs affecting melanoma seasonality. On balance the positives (revenue/volume acceleration, guidance raise, evidence/regulatory progress, cash runway and adjusted EBITDA) outweigh the negatives.Positive Updates
Revenue Growth and Guidance Raise
Total revenue of $103.5M in Q2 2026, up 20% year-over-year. Company raised 2026 revenue guidance to $365M–$375M (prior: $345M–$355M), a ~$20M upward revision driven by performance to date.
Negative Updates
GAAP and Adjusted Gross Margin Compression
GAAP gross margin declined to 74.9% in Q2 2026 from 77.3% in Q2 2025. Adjusted gross margin slipped to 76.3% from 79.5% YoY; full‑year adjusted gross margin expected in the low‑to‑mid‑70s.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue Growth and Guidance Raise
Total revenue of $103.5M in Q2 2026, up 20% year-over-year. Company raised 2026 revenue guidance to $365M–$375M (prior: $345M–$355M), a ~$20M upward revision driven by performance to date.
Read all positive updates
Company Guidance
Castle raised 2026 revenue guidance to $365–$375 million (from $345–$355M) and said it expects adjusted gross margin in the low‑ to mid‑70s for FY2026; management reiterated DecisionDx‑Melanoma volume guidance of mid‑ to high‑single‑digit growth for 2026 and said TissueCypher test‑report volume should trend toward ~50–52% growth for the year (TissueCypher delivered 14,988 reports in Q2, +63% YoY), AdvanceAD‑Tx had >1,000 orders in Q2 and received a CMS crosswalk panel recommendation at a $3,675 rate, Q2 adjusted EBITDA was $12.4M and the company expects positive adjusted EBITDA in Q3, Q4 and for full‑year 2026 (and for 2027), and management noted it has $266.8M in cash, cash equivalents and marketable securities (6/30/26) to fund continued commercial, evidence‑development and lab investments.Castle Biosciences Financial Statement Overview
Summary
Income Statement
64
Positive
Balance Sheet
82
Very Positive
Cash Flow
71
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 357.28M | 344.23M | 332.07M | 219.79M | 137.04M | 94.08M |
| Gross Profit | 276.03M | 273.20M | 271.86M | 174.81M | 105.03M | 78.26M |
| EBITDA | -3.24M | 11.34M | 38.14M | -45.02M | -58.34M | -36.60M |
| Net Income | -19.41M | -24.16M | 18.25M | -57.47M | -67.14M | -31.29M |
Balance Sheet | ||||||
| Total Assets | 561.18M | 578.56M | 531.24M | 453.34M | 447.33M | 462.57M |
| Cash, Cash Equivalents and Short-Term Investments | 266.81M | 299.50M | 293.13M | 243.10M | 258.63M | 329.63M |
| Total Debt | 36.65M | 36.91M | 26.34M | 15.34M | 13.40M | 8.20M |
| Total Liabilities | 91.15M | 107.68M | 75.40M | 62.07M | 48.18M | 50.83M |
| Stockholders Equity | 470.03M | 470.87M | 455.83M | 391.27M | 399.15M | 411.74M |
Cash Flow | ||||||
| Free Cash Flow | -489.00K | 28.33M | 36.54M | -19.25M | -47.29M | -22.47M |
| Operating Cash Flow | 42.63M | 64.35M | 64.87M | -5.63M | -41.66M | -18.98M |
| Investing Cash Flow | -51.32M | -60.37M | -50.14M | -16.18M | -166.54M | -66.66M |
| Financing Cash Flow | -11.43M | -6.96M | 6.14M | -2.30M | 1.51M | 5.42M |
Castle Biosciences Technical Analysis
Positive
24.68
Price Trends
23.51
Positive
23.42
Positive
29.03
Positive
Market Momentum
1.87
Negative
73.74
Negative
86.92
Negative
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 24.68 is below the 20-day moving average (MA) of 25.78, above the 50-day MA of 23.51, and below the 200-day MA of 29.03, indicating a bullish trend. The MACD of 1.87 indicates Negative momentum. The RSI at 73.74 is Negative, neither overbought nor oversold. The STOCH value of 86.92 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CSTL.
Castle Biosciences Risk Analysis
Castle Biosciences disclosed 77 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
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $2.26B | 20.31 | 32.81% | ― | 34.41% | 90.73% | |
71 Outperform | $855.39M | -42.46 | -4.15% | ― | 3.18% | -100.37% | |
60 Neutral | $1.96B | -7.71 | -6.31% | ― | 11.19% | 50.58% | |
53 Neutral | $1.35B | -12.41 | -46.47% | ― | -24.71% | 21.16% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
48 Neutral | $455.38M | -5.87 | -7.87% | ― | 6.83% | -69.59% | |
47 Neutral | $270.12M | -2.39 | -32.59% | ― | -3.16% | 72.02% |
* Healthcare Sector Average
CSTL
Castle Biosciences
30.47
10.82
55.06%
MYGN
Myriad Genetics
3.18
-2.92
-47.87%
NEO
NeoGenomics
15.56
9.80
170.14%
CDNA
CareDx
44.81
32.74
271.25%
FLGT
Fulgent Genetics
18.55
-1.86
-9.09%
PSNL
Personalis
13.03
8.49
186.69%
Castle Biosciences Corporate Events
Business Operations and StrategyFinancial Disclosures
Castle Biosciences Lifts 2026 Outlook After Q2 Growth
Positive
Jul 30, 2026
Castle Biosciences, Inc. is a diagnostics company focused on improving health through innovative tests that guide patient care, with a portfolio spanning dermatology, ophthalmology and gastroenterology. Its primary products include DecisionDx-Mela...
Executive/Board ChangesShareholder Meetings
Castle Biosciences Shareholders Back Board, Governance and Pay
Positive
May 29, 2026
On May 28, 2026, Castle Biosciences, Inc. held its 2026 annual meeting of stockholders, where shareholders elected three Class I directors — Ellen Goldberg, Miles D. Harrison and Tiffany P. Olson — to serve until the 2029 annual meetin...
Business Operations and StrategyFinancial Disclosures
Castle Biosciences Posts Strong Q1 Results, Raises 2026 Guidance
Positive
May 6, 2026
Castle Biosciences reported first-quarter 2026 results on May 6, 2026, posting revenue of $83.7 million and a 36% year-over-year increase in test volumes for its core DecisionDx-Melanoma and TissueCypher assays, despite lower overall revenue than ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.