Download PDF

1. Company Snapshot

1.a. 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.

Show Full description

1.b. Last Insights on CSTL

Castle Biosciences' recent performance was driven by several positive factors. The company reported a 21% increase in Q1 2025 revenue to $88 million, surpassing the previous year's revenue. This growth was fueled by a 33% increase in total test reports for its core revenue drivers, including DecisionDx-Melanoma, DecisionDx-SCC, and TissueCypher. Additionally, the company raised its full-year 2025 revenue guidance to $287-297 million from $280-295 million, indicating a positive outlook. The company has also made significant strides in expanding its product offerings and partnerships. Castle Biosciences entered into a collaboration and license agreement with SciBase to develop diagnostic tests for dermatologic diseases, leveraging SciBase's Electrical Impedance Spectroscopy technology. Furthermore, the company's CEO, Derek Maetzold, will participate in a panel discussion at the 2025 BIO International Convention, highlighting the company's commitment to precision medicine and innovative diagnostic tests. The company's commitment to employee development is also evident, as it granted restricted stock units to 66 employees as an inducement to join the company. This move demonstrates the company's investment in its workforce and its efforts to attract top talent in the industry. Overall, Castle Biosciences' recent performance is characterized by strong revenue growth, expanded product offerings, and a commitment to employee development. These factors contribute to a positive outlook for the company.

1.c. Company Highlights

2. Castle Biosciences' Q3 2025 Earnings: Strong Revenue Growth and Expanded Product Portfolio

Castle Biosciences reported a robust third quarter of 2025, with revenue reaching $83 million, driven by a 36% year-over-year increase in total test report volume to 26,841. The company's DecisionDx-Melanoma test reports grew 12% year-over-year to 10,459, contributing to the revenue surge. The gross margin was 74.7%, and adjusted gross margin was 76.8%. Net loss for Q3 2025 was $0.5 million, with diluted loss per share of $0.02, significantly better than the estimated loss per share of -$0.34. Adjusted EBITDA was $9.2 million, and net cash provided by operating activities was $22.6 million.

Publication Date: Nov -25

📋 Highlights
  • Revenue and Test Volume Growth:: Q3 2025 revenue reached $83 million, with total test reports up 36% YoY to 26,841, driven by DecisionDx-Melanoma (12% growth to 10,459) and DecisionDx-SCC (4,186 reports).
  • AdvanceAD-Tx Launch:: New test targeting $33 billion TAM for atopic dermatitis (13.2 million US patients) plans limited clinical launch in November 2025, with immaterial 2026 revenue contribution expected.
  • Financial Performance:: Adjusted EBITDA rose to $9.2 million, net loss narrowed to $0.5 million, and cash reserves reached $287.5 million, with gross margins at 74.7%.
  • Guidance and Market Confidence:: 2025 revenue guidance raised to $327–$335 million, reflecting high single-digit melanoma volume growth and strong TissueCypher performance with double-digit market penetration.

Revenue Growth Drivers

The company's DecisionDx-Melanoma test volumes grew 5% sequentially, driven by a focused dermatology sales force and medical communication support. The TissueCypher test also showed a record quarter, with double-digit market penetration. The company believes there's still a long way to go in terms of patient penetration and plans to continue educating the market.

New Product Launch and Market Opportunity

Castle Biosciences launched AdvanceAD-Tx, a test guiding systemic treatment selection for patients with moderate to severe atopic dermatitis, with an estimated addressable market of around 13.2 million patients in the US, representing a $33 billion total addressable market opportunity. The company expects revenue contribution from AdvanceAD-Tx to be immaterial in 2026 and plans to clinically launch the test on a limited access model in November 2025.

Guidance and Outlook

The company raised its revenue guidance to $327 million to $335 million for 2025 and assumes high single-digit year-over-year growth in melanoma volumes, with no significant ASP improvement. Analysts estimate next year's revenue growth at -1.1%, indicating a potential slowdown.

Valuation Metrics

Castle Biosciences' current valuation metrics indicate a P/S Ratio of 3.24 and an EV/EBITDA of 43.1. The stock's P/E Ratio is -117.57, reflecting the company's current loss-making status. The company's ROE and ROIC are -2.11% and -4.28%, respectively, indicating a need for improvement in profitability.

3. NewsRoom

Card image cap

Castle Biosciences (CSTL) is on the Move, Here's Why the Trend Could be Sustainable

Nov -21

Source: zacks.com

Card image cap

5 Stocks With Recent Price Strength Amid Wall Street Volatility

Nov -20

Source: zacks.com

Card image cap

Castle Biosciences Earns a Houston Chronicle Top Workplaces Award for the Fifth Consecutive Year

Nov -17

Source: globenewswire.com

Card image cap

Forget the Fed, Bet on These 4 Stocks With Increasing Cash Flows

Nov -14

Source: zacks.com

Card image cap

New Data Confirms Performance of DecisionDx®-Melanoma to Identify Patients with Less Than Five Percent Risk of Sentinel Lymph Node Positivity

Nov -14

Source: globenewswire.com

Card image cap

Castle Biosciences to Present at the Piper Sandler 37th Annual Healthcare Conference

Nov -11

Source: globenewswire.com

Card image cap

4 Stocks With Recent Price Strength to Enhance Your Portfolio

Nov -11

Source: zacks.com

Card image cap

Why Castle Biosciences' Rally Might Just Be Getting Started

Nov -05

Source: benzinga.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.66%)

6. Segments

Dermatologic

Expected Growth: 6.5%

Castle Biosciences' Dermatologic segment growth of 6.5% is driven by increasing demand for skin cancer diagnostics, adoption of precision medicine, and expansion into new markets. Additionally, advancements in genetic testing and personalized treatment options contribute to the segment's growth.

Non-Dermatologic

Expected Growth: 7.5%

Castle Biosciences' Non-Dermatologic segment growth of 7.5% is driven by increasing adoption of DecisionDx-SCC, a gene expression profile test for merkel cell carcinoma, and DecisionDx-Melanoma, a test for cutaneous melanoma. Growing demand for personalized medicine, expansion into new markets, and strategic partnerships also contribute to the segment's growth.

7. Detailed Products

DecisionDx-Melanoma

A gene expression profile test that helps diagnose and manage melanoma, providing critical information for treatment decisions.

DecisionDx-SCC

A gene expression profile test that helps diagnose and manage squamous cell carcinoma, providing critical information for treatment decisions.

DecisionDx-UM

A gene expression profile test that helps diagnose and manage uveal melanoma, providing critical information for treatment decisions.

MyPath Melanoma

A diagnostic test that helps diagnose melanoma by analyzing a skin lesion's genetic material.

TissueCypher

A diagnostic test that helps diagnose and manage skin cancer by analyzing a skin lesion's genetic material.

8. Castle Biosciences, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Castle Biosciences, Inc. has a moderate threat of substitutes due to the availability of alternative diagnostic tests and treatments for skin cancer.

Bargaining Power Of Customers

Castle Biosciences, Inc. has a low bargaining power of customers due to the lack of negotiating power of individual patients and the high demand for its diagnostic tests.

Bargaining Power Of Suppliers

Castle Biosciences, Inc. has a moderate bargaining power of suppliers due to the availability of multiple suppliers for its diagnostic tests and the moderate switching costs.

Threat Of New Entrants

Castle Biosciences, Inc. has a high threat of new entrants due to the low barriers to entry in the diagnostic test market and the high demand for innovative diagnostic solutions.

Intensity Of Rivalry

Castle Biosciences, Inc. operates in a highly competitive market with several established players, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 3.77%
Debt Cost 3.95%
Equity Weight 96.23%
Equity Cost 8.60%
WACC 8.42%
Leverage 3.92%

11. Quality Control: Castle Biosciences, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
CareDx

A-Score: 3.9/10

Value: 5.0

Growth: 7.9

Quality: 8.1

Yield: 0.0

Momentum: 1.0

Volatility: 1.7

1-Year Total Return ->

View Full Report
Stock-Card
Castle Biosciences

A-Score: 3.5/10

Value: 4.8

Growth: 8.2

Quality: 5.2

Yield: 0.0

Momentum: 1.0

Volatility: 2.0

1-Year Total Return ->

View Full Report
Stock-Card
Aspira Women's Health

A-Score: 3.4/10

Value: 9.8

Growth: 4.7

Quality: 5.6

Yield: 0.0

Momentum: 0.5

Volatility: 0.0

1-Year Total Return ->

View Full Report
Stock-Card
Standard BioTools

A-Score: 3.1/10

Value: 7.8

Growth: 3.6

Quality: 4.3

Yield: 0.0

Momentum: 1.5

Volatility: 1.3

1-Year Total Return ->

View Full Report
Stock-Card
Biodesix

A-Score: 2.7/10

Value: 7.6

Growth: 4.2

Quality: 3.8

Yield: 0.0

Momentum: 0.0

Volatility: 0.7

1-Year Total Return ->

View Full Report
Stock-Card
Star Equity Holdings

A-Score: 2.6/10

Value: 9.4

Growth: 0.9

Quality: 4.3

Yield: 0.0

Momentum: 1.0

Volatility: 0.0

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

39.62$

Current Price

39.62$

Potential

-0.00%

Expected Cash-Flows