Castle Biosciences (CSTL) AI Stock Analysis

• Market Cap: $879.15M
• Dividend Yield: N/A
• Average Volume (3M): 399.44K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.50
• Revenue Growth: 10.15%
• EPS Growth: -295.52%
• Country: US
• Employees: 784
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Diagnostics & Research
• EPS (TTM): -0.08
• Shares Outstanding: 29,731,197
• 10 Day Avg. Volume: 400,376
• 30 Day Avg. Volume: 399,439
• PEG Ratio: 0.21
• Price to Book (P/B): 2.39
• Price to Sales (P/S): 3.28
• P/FCF Ratio: 39.81
• Enterprise Value/Market Cap: 0.89
• Enterprise Value/Revenue: 2.28
• Enterprise Value/Gross Profit: 3.83
• Enterprise Value/Ebitda: 59.64
• 1Y Price Target: $48.83
• Price Target Upside: 65.13% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): -1.29
• Revenue Forecast (FY): $333.84M

• Rating: 60 Neutral
• Price Target: $31.00 ▲(4.84% Upside)
• Action: Reiterated Date: 02/28/26
• Date: Action: Reiterated 02/28/26

The score is supported most by solid underlying financial strength (low leverage, improving cash generation, strong multi-year revenue growth) and a constructive earnings outlook for continued core-franchise growth. It is held back by inconsistent profitability/margin pressure and reimbursement-related uncertainty, alongside bearish technical momentum and limited valuation support due to losses and no dividend.

Positive Factors

Revenue & Test Volume Growth

Multi-year revenue growth and a 37% rise in total test reports indicate durable commercial traction for Castle's core diagnostic franchises. Sustained volume expansion across core tests supports predictable service demand, revenue visibility and scalability of lab operations over the next several quarters.

Strong Balance Sheet & Cash Generation

A nearly $300M liquidity cushion combined with positive free cash flow in 2025 gives Castle flexibility to fund commercialization, R&D, and targeted M&A while absorbing reimbursement or timing setbacks. Low leverage enhances financial resilience and underpins multi-quarter investment capacity.

Clinical Evidence & Market Position

A deep evidence base and growing clinician adoption create a defensible commercial moat for DecisionDx‑Melanoma and TissueCypher. High-quality publications, rising ordering clinicians and improving patient penetration support sustained referral patterns and pricing leverage over time.

Negative Factors

Profitability Volatility

Sharp swings from profit to loss and a meaningful decline in adjusted EBITDA reflect volatile margins and earnings quality. This inconsistency hampers predictable return on invested capital, complicates reinvestment planning and increases sensitivity to one‑time charges and product mix shifts.

Reimbursement & Guideline Uncertainty

Persistent guideline and payer coverage gaps materially affect uptake and reimbursement for key tests. Without clearer NCCN inclusion or payer coverage, adoption and margin recovery can stall for multiple quarters, creating a structural headwind to consistent revenue and profitability.

Timing Risk for New Products

New product commercialization and regulatory milestones carry multi‑quarter timing uncertainty. Delays in FDA clearance or reimbursement clarity postpone anticipated revenue diversification and margin benefits, extending reliance on existing franchises to drive near‑term growth.

Castle Biosciences Business Overview & Revenue Model

Company Description

Castle 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 Money

Castle Biosciences generates revenue primarily through the sale of its diagnostic tests, which are utilized by healthcare providers to assess cancer risk and guide treatment decisions. The company operates a laboratory that processes these tests, and it bills healthcare insurers and patients for these services. Key revenue streams include reimbursement from insurance companies, direct payments from patients, and partnerships with healthcare providers and institutions that utilize its testing services. Additionally, Castle Biosciences may benefit from collaborations or licensing agreements that enhance its market reach and product offerings.

Castle Biosciences Financial Statement Overview

Summary

Strong, sustained revenue growth and a low-leverage balance sheet support financial flexibility, and operating/free cash flow turned positive in 2024–2025. Offsetting this, profitability has been inconsistent (back to a net loss in 2025) and the provided 2025 gross profit/margin datapoint is unreliable (gross profit shown as zero), reducing confidence in current margin durability.

Income Statement

Revenue growth has been consistently strong across the period (roughly 20%–60% annually), indicating solid demand and commercial traction. Profitability, however, has been volatile: the company swung from meaningful losses in 2021–2023 to profitability in 2024, then back to losses in 2025 (net margin about -7%). Gross margin was very strong historically (~77%–85%), but 2025 gross profit is shown as zero, which undermines visibility into current underlying unit economics and pressures the quality of the earnings picture.

Balance Sheet

The balance sheet appears conservatively levered, with low debt relative to equity (debt-to-equity ~2%–8% across the years) and a sizeable equity base that has generally grown over time. This provides flexibility to fund growth and withstand earnings volatility. The main weakness is inconsistent returns on equity driven by uneven profitability—positive in 2024 but negative again in 2025—suggesting the capital base is not yet translating into stable shareholder returns.

Cash Flow

Cash generation has improved materially versus 2021–2023: operating cash flow and free cash flow are positive in both 2024 and 2025, with 2025 free cash flow still solid despite a net loss. That said, cash flow has not been consistently positive historically (notably negative in 2021–2023), and in 2025 operating cash flow was less than net income in magnitude (coverage below 1), implying earnings quality and working-capital dynamics should be monitored even as free cash flow remains positive.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	344.23M	332.07M	219.79M	137.04M	94.08M
Gross Profit	0.00	271.86M	174.81M	105.03M	78.26M
EBITDA	11.34M	38.14M	-45.02M	-58.34M	-36.60M
Net Income	-24.16M	18.25M	-57.47M	-67.14M	-31.29M
Balance Sheet
Total Assets	578.56M	531.24M	453.34M	447.33M	462.57M
Cash, Cash Equivalents and Short-Term Investments	299.50M	293.13M	243.10M	258.63M	329.63M
Total Debt	36.91M	26.34M	15.34M	13.40M	8.20M
Total Liabilities	107.68M	75.40M	62.07M	48.18M	50.83M
Stockholders Equity	470.87M	455.83M	391.27M	399.15M	411.74M
Cash Flow
Free Cash Flow	28.33M	36.54M	-19.25M	-47.29M	-22.47M
Operating Cash Flow	64.35M	64.87M	-5.63M	-41.66M	-18.98M
Investing Cash Flow	-60.37M	-50.14M	-16.18M	-166.54M	-66.66M
Financing Cash Flow	-6.96M	6.14M	-2.30M	1.51M	5.42M

Castle Biosciences Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 29.57
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 29.57 is below the 20-day moving average (MA) of 32.94, below the 50-day MA of 37.28, and above the 200-day MA of 26.86, indicating a neutral trend. The MACD of -2.17 indicates Positive momentum. The RSI at 33.70 is Neutral, neither overbought nor oversold. The STOCH value of 46.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CSTL.

Castle Biosciences Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CSTL	60 Neutral	$879.15M	-34.91	-2.69%	―	10.15%	-295.52%
CDNA	56 Neutral	$960.82M	-47.58	24.11%	―	14.46%	―
PSNL	53 Neutral	$804.57M	-9.97	-43.69%	―	-21.02%	47.74%
NEO	52 Neutral	$1.28B	-11.65	-12.42%	―	10.10%	-44.29%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
FLGT	50 Neutral	$473.89M	-10.94	-3.80%	―	13.60%	74.64%
MYGN	48 Neutral	$431.07M	-1.17	-68.45%	―	0.21%	-233.51%

Castle Biosciences Corporate Events

Castle Biosciences Posts Modest 2025 Growth Amid Headwinds

On Feb. 26, 2026, Castle Biosciences reported fourth-quarter and full-year 2025 results, posting 2025 revenue of $344.2 million, up 4% year over year and above guidance, with core tests DecisionDx-Melanoma and TissueCypher driving a 37% increase in total test reports. Overall growth was tempered by Medicare coverage changes for DecisionDx-SCC and the May 2025 discontinuation of IDgenetix, contributing to a shift from 2024 net income to a 2025 net loss of $24.2 million, even as the company generated $64.3 million in operating cash flow and ended the year with $299.5 million in cash and investments.

Fourth-quarter 2025 revenue rose 1% to $87.0 million, with core test volumes up 42%, but the company moved from prior-year quarterly profit to a small net loss as Adjusted EBITDA declined to $11.5 million. During late 2025, Castle bolstered its clinical and market positioning with new consensus and clinical data supporting DecisionDx-Melanoma, a meta-analysis validating TissueCypher’s risk-stratification performance, and the limited access launch of AdvanceAD-Tx, while guiding for 2026 revenue in the $340–350 million range, signaling continued focus on high-growth, high-evidence franchises despite reimbursement headwinds and portfolio pruning.

The most recent analyst rating on (CSTL) stock is a Buy with a $50.00 price target. To see the full list of analyst forecasts on Castle Biosciences stock, see the CSTL Stock Forecast page.

Castle Biosciences Reports Strong Preliminary 2025 Revenue Growth

On Jan. 11, 2026, Castle Biosciences reported preliminary, unaudited results for the fourth quarter and full year ended Dec. 31, 2025, indicating 2025 total revenue is expected to exceed $340 million, above its prior guidance of $327–335 million, driven by strong growth in its core tests DecisionDx-Melanoma and TissueCypher, whose combined test volumes rose 37% year over year. The company also highlighted a 42% year-over-year increase in fourth-quarter core test reports, robust adoption of its November 2025 limited-access launch of AdvanceAD-Tx for atopic dermatitis, and an expected year-end 2025 liquidity position of roughly $300 million in cash, cash equivalents and marketable securities, while noting headwinds from Medicare coverage changes for DecisionDx-SCC and the discontinuation of its IDgenetix test in May 2025 as it refocuses its portfolio and reinforces its balance sheet ahead of planned growth in 2026.

The most recent analyst rating on (CSTL) stock is a Buy with a $50.00 price target. To see the full list of analyst forecasts on Castle Biosciences stock, see the CSTL Stock Forecast page.