Castle Biosciences (CSTL) AI Stock Analysis

• Market Cap: $1.17B
• Dividend Yield: N/A
• Average Volume (3M): 455.97K
• 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): -0.02
• Shares Outstanding: 29,188,660
• 10 Day Avg. Volume: 449,787
• 30 Day Avg. Volume: 455,966
• 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: 0.35
• Enterprise Value/Revenue: 1.20
• Enterprise Value/Gross Profit: 1.50
• Enterprise Value/Ebitda: 15.96
• 1Y Price Target: $34.39
• Price Target Upside: -13.92% Downside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): -1.81
• Revenue Forecast (FY): $317.42M

• Rating: 60 Neutral
• Price Target: $40.00 ▲(0.13% Upside)

Castle Biosciences' overall score reflects a mix of strong revenue growth and strategic initiatives from the earnings call, offset by financial performance challenges and valuation concerns. The technical analysis suggests bullish momentum, but valuation metrics highlight profitability issues.

Positive Factors

Revenue Growth and Guidance Increase

The increase in revenue guidance reflects strong demand for Castle Biosciences' products, indicating robust market positioning and potential for sustained growth.

Launch of AdvanceAD-Tx

The launch of AdvanceAD-Tx opens a new market opportunity in dermatology, potentially driving long-term revenue growth and strengthening the company's product portfolio.

Strong Cash Position

A strong cash position provides financial flexibility to invest in growth initiatives, R&D, and potential acquisitions, supporting long-term strategic goals.

Negative Factors

Gross Margin Decline

The decline in gross margin suggests rising costs, which could pressure profitability if not managed, impacting long-term financial performance.

Net Loss Reported

Reporting a net loss indicates challenges in achieving profitability, which could hinder future investment and growth if not addressed.

Uncertainty in SCC Reimbursement

Reimbursement uncertainty for SCC tests could affect revenue stability and predictability, posing a risk to financial planning and market confidence.

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 maintains a strong gross profit margin and a stable balance sheet with low leverage. However, challenges persist with declining revenue growth and profitability, alongside negative free cash flow growth. The company needs to address these issues to improve its financial health and investor confidence.

Income Statement

Castle Biosciences has shown a volatile revenue growth trajectory, with a significant decline in the TTM period. The gross profit margin remains strong, indicating efficient cost management, but the company struggles with profitability as reflected in negative net profit and EBIT margins. The recent revenue contraction poses a challenge to future growth.

Balance Sheet

The balance sheet is relatively stable with a low debt-to-equity ratio, indicating conservative leverage. However, the negative return on equity suggests inefficiencies in generating returns from equity investments. The equity ratio is healthy, suggesting a strong capital structure.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth, but the company maintains a positive operating cash flow to net income ratio. The free cash flow to net income ratio is moderate, indicating some ability to convert earnings into cash. However, the negative growth in free cash flow is a concern.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	343.53M	332.07M	219.79M	137.04M	94.08M	62.65M
Gross Profit	274.63M	271.86M	174.81M	105.03M	78.26M	52.96M
EBITDA	25.79M	38.14M	-45.02M	-58.34M	-36.60M	-7.09M
Net Income	-12.24M	18.25M	-57.47M	-67.14M	-31.29M	-10.28M
Balance Sheet
Total Assets	562.79M	531.24M	453.34M	447.33M	462.57M	439.33M
Cash, Cash Equivalents and Short-Term Investments	287.54M	293.13M	243.10M	258.63M	329.63M	409.85M
Total Debt	37.14M	26.34M	15.34M	13.40M	8.20M	0.00
Total Liabilities	95.74M	75.40M	62.07M	48.18M	50.83M	23.64M
Stockholders Equity	467.05M	455.83M	391.27M	399.15M	411.74M	415.69M
Cash Flow
Free Cash Flow	25.38M	36.54M	-19.25M	-47.29M	-22.47M	5.11M
Operating Cash Flow	61.78M	64.87M	-5.63M	-41.66M	-18.98M	9.87M
Investing Cash Flow	-63.43M	-50.14M	-16.18M	-166.54M	-66.66M	-4.75M
Financing Cash Flow	-7.76M	6.14M	-2.30M	1.51M	5.42M	305.89M

Castle Biosciences Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 39.95
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: 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 39.95 is above the 20-day moving average (MA) of 34.47, above the 50-day MA of 27.73, and above the 200-day MA of 21.79, indicating a bullish trend. The MACD of 3.54 indicates Negative momentum. The RSI at 84.21 is Negative, neither overbought nor oversold. The STOCH value of 93.21 is Negative, 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
CDNA	77 Outperform	$883.61M	14.41	24.11%	―	14.46%	―
CSTL	60 Neutral	$1.17B	―	-2.69%	―	10.15%	-295.52%
FLGT	60 Neutral	$914.39M	―	-3.80%	―	13.60%	74.64%
PSNL	57 Neutral	$952.87M	―	-43.69%	―	-21.02%	47.74%
NEO	55 Neutral	$1.57B	―	-12.99%	―	10.10%	-44.29%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
MYGN	49 Neutral	$711.22M	―	-72.52%	―	0.21%	-233.51%

Castle Biosciences Corporate Events

Castle Biosciences Navigates Regulatory Uncertainty Amid Shifting Policies and Trade Challenges

Castle Biosciences faces significant uncertainty due to potential changes in government regulations, both domestically and internationally. The evolving policies of the FDA and other regulatory bodies, influenced by shifts in U.S. presidential administrations, could impose new compliance obligations that may impact the company’s ability to maintain marketing approvals and achieve profitability. Additionally, international trade measures, such as tariffs, could further complicate their operational and financial stability. The unpredictability of these regulatory changes poses a considerable risk to Castle Biosciences’ future business performance.

Castle Biosciences’ Earnings Call Highlights Growth and Challenges

Castle Biosciences’ recent earnings call painted a picture of robust growth tempered by some financial challenges. The company reported strong revenue growth and the successful launch of a new dermatological test, AdvanceAD-Tx. However, it also faced a decline in gross margin, a net loss, and uncertainties surrounding SCC reimbursement. Despite these hurdles, Castle Biosciences’ strategic initiatives and positive momentum suggest a well-balanced performance overall.

Castle Biosciences Reports Strong Q3 2025 Results

Castle Biosciences, a leading diagnostics company in the dermatologic and gastroenterological sectors, is known for its innovative tests that guide patient care.

Castle Biosciences Raises Revenue Guidance Amid Strong Q3

Castle Biosciences reported strong financial results for the third quarter of 2025, with revenue reaching $83 million and a significant increase in test report volumes for their core products. Despite challenges such as the Novitas LCD and discontinuation of IDgenetix, the company raised its full-year revenue guidance to $327-335 million. The launch of AdvanceAD-Tx, a new test for atopic dermatitis, highlights their commitment to addressing unmet needs in clinical dermatology.

The most recent analyst rating on (CSTL) stock is a Buy with a $23.56 price target. To see the full list of analyst forecasts on Castle Biosciences stock, see the CSTL Stock Forecast page.

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.