One-glance verdict
Within fair range
$44.93 our estimate vs market $34.88
Wall Street consensus: $45.11 (0.4% higher than our fair-value estimate)
22% below our estimate
Fundamentals snapshot
Castle Biosciences, Inc.
CSTL · NGM · Healthcare · Diagnostics & Research
Current price
$34.88
52-week range
$17.72 - $44.28
Market cap
$1.07B
Balance sheet
Healthy
-497.79x Concerning
Net cash $230.15M. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
2 Risks
2 rewards · 2 risks
- Reward Revenue grew 3.8% last year.
- Reward Free cash flow was positive in 4/10 years.
- Risk Return on equity was -4.2% last year — the company lost money on shareholders' equity.
- Risk Insider ownership is only 2.4% (peer median: 3.4%).
What this company does
Castle Biosciences, Inc.
Castle Biosciences develops and sells advanced genetic tests that help doctors diagnose and treat serious diseases like skin cancer and a pre-cancerous esophagus condition. The company primarily earns money by providing these specialized tests to doctors, who use them to predict the risk of a patient's disease getting worse. This is important because it allows for more personalized treatment plans, potentially catching cancer before it spreads or helping patients avoid unnecessary procedures.
How the company got here
Castle Biosciences was founded in 2007 with the idea that understanding the specific biology of a patient's tumor could lead to better treatment decisions. The company started by focusing on developing tests for skin cancers, particularly melanoma. A major turning point was its initial public offering (IPO) in 2019, which provided the money to grow its business and develop more tests. Since then, it has expanded beyond skin cancer by acquiring companies with tests for diseases of the esophagus and for helping to choose mental health medications.
What it actually does
Castle Biosciences develops and sells specialized laboratory tests that analyze the genes in a patient's cells to provide personalized information about their disease. Think of these tests as providing a biological roadmap to help doctors and patients make more informed decisions about treatment. For example, a test might predict how likely a cancer is to spread, helping a doctor decide on the best course of action. The company's tests are primarily used for certain types of skin cancer, a condition in the esophagus that can lead to cancer, and to help guide treatment for some mental health conditions.
Dermatology
This is the company's largest and original business, making up the majority of its revenue. It offers a number of tests for skin cancer, with its main product being DecisionDx-Melanoma, which helps predict the likelihood that a patient's melanoma will spread. Doctors who treat skin conditions, called dermatologists, order these tests to get a better understanding of a patient's specific cancer and to help guide treatment decisions. This part of the business has been the foundation of the company's growth.
Gastroenterology
This is a newer and growing part of Castle's business that focuses on diseases of the digestive system. Its main product in this area is the TissueCypher Barrett's Esophagus test, which helps predict the risk of a condition called Barrett's esophagus developing into esophageal cancer. Doctors who specialize in the digestive system, called gastroenterologists, use this test to determine how closely to monitor patients with this condition. This represents a key area of expansion for the company beyond its original focus on skin cancer.
Mental Health
This is another area of expansion for Castle Biosciences, entered through an acquisition. The key product here is IDgenetix, a test that analyzes a patient's genes to help predict how they might respond to different medications for mental health conditions. The goal is to help doctors choose the most effective medication for a patient more quickly, avoiding a trial-and-error approach. This is a smaller part of the business, and the company has adjusted its sales strategy to focus on profitability.
What management is betting on now
The company's leadership is focused on growing the number of doctors who use their key tests, especially DecisionDx-Melanoma and TissueCypher. They are also investing in research and development (the process of creating new products and improving existing ones) to create new tests for other diseases where there is a need for better diagnostic information. A major priority is to secure broader reimbursement (the payment that insurance companies and government programs like Medicare make for the tests), which would make the tests more widely available to patients and improve the company's financial performance. Management is also aiming to become consistently profitable by increasing sales and managing costs.
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$16.96M
FY2024 Q4
$16.80M
FY2025 Q1
$-10.78M
FY2025 Q2
$11.56M
FY2025 Q3
$7.80M
FY2025 Q4
$19.75M
FY2026 Q1
$-34.58M
FY2026 Q2
$6.55M
Revenue
$103.55M
Net income
$-2.06M
Diluted EPS
-0.07
Operating cash flow
$15.20M
Free cash flow
$6.55M
Fetching…
Sources
Revenue
$83.68M
Net income
$-14.52M
Diluted EPS
-0.49
Operating cash flow
$-22.13M
Free cash flow
$-34.58M
Fetching…
Sources
Revenue
$87.01M
Net income
$-2.33M
Diluted EPS
-0.06
Operating cash flow
$26.93M
Free cash flow
$19.75M
Fetching…
Sources
Revenue
$83.04M
Net income
$-501.00K
Diluted EPS
-0.02
Operating cash flow
$22.63M
Free cash flow
$7.80M
Fetching…
Sources
Revenue
$86.19M
Net income
$4.52M
Diluted EPS
0.15
Operating cash flow
$20.82M
Free cash flow
$11.56M
Fetching…
Sources
Revenue
$87.99M
Net income
$-25.85M
Diluted EPS
-0.90
Operating cash flow
$-6.04M
Free cash flow
$-10.78M
Fetching…
Sources
Revenue
$86.31M
Net income
$9.59M
Diluted EPS
0.32
Operating cash flow
$24.36M
Free cash flow
$16.80M
Fetching…
Sources
Revenue
$85.78M
Net income
$2.27M
Diluted EPS
0.08
Operating cash flow
$23.34M
Free cash flow
$16.96M
Fetching…
Sources
Is it cheap or expensive?
Fair value $44.93 vs current price $34.88
Wall Street consensus is the average analyst price target: $45.11 (0.4% higher than our fair-value estimate).
Our most-likely fair value is $44.93 a share — about 28.8% away from today's price of $34.88, so the stock currently looks fairly priced.
Is it drowning in debt?
Healthy
Net cash $230.2M - more cash than debt. Interest coverage -497.8x.
Net debt
$-230.15M
Interest coverage
-497.79x
Castle Biosciences, Inc.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here and 3 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
CSTL
BASELINE
Castle Biosciences, Inc.
Total debt $36.65M Interest coverage -497.79x This is the baseline the peer rows are being compared against.
Total debt $40.11M Interest coverage 78,282.00x This peer still has a real interest-payment cushion, while CSTL does not.
Total debt $9.60M Interest coverage -1,214.61x Neither company has much profit cushion over interest right now.
Total debt $1.70B Interest coverage -112.20x Neither company has much profit cushion over interest right now.
Total debt $238.49M Interest coverage -76.16x Neither company has much profit cushion over interest right now.
What you should know
The case for and against CSTL
2 Rewards
2 Risks
Rewards
-
Revenue grew 3.8% last year.
-
Free cash flow was positive in 4/10 years.
Risks
-
Return on equity was -4.2% last year — the company lost money on shareholders' equity.
-
Insider ownership is only 2.4% (peer median: 3.4%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
—
Forward P/E
-35.27x
P/B
2.26x
P/S
2.98x
EV/EBITDA
-50.58x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
77.3%
Operating margin
-3.0%
Net margin
-5.4%
ROE
-4.2%
ROA
-1.4%
Health
Liquidity and balance-sheet strength
Debt / equity
0.08x
Current ratio
6.04x
Quick ratio
5.60x
Total debt
$36.65M
Total cash
$266.80M
Growth
How the business has been compounding
Revenue TTM
$357.28M
Revenue 5Y CAGR
38.3%
EPS TTM
-0.64
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$42.63M
Free CF TTM
$28.33M
FCF margin
7.9%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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