Castle Biosciences (CSTL): Valuation in Focus After Raised Guidance and Launch of AdvanceAD-Tx Test

Castle Biosciences (CSTL) drew attention with a busy announcement day, unveiling third quarter results, raising its full-year revenue outlook for 2025, and launching a new gene expression test for atopic dermatitis.

See our latest analysis for Castle Biosciences.

It’s been a lively period for Castle Biosciences, with the share price up an impressive 52.6% over the last month and gaining nearly 70% in the past 90 days. This strong momentum follows the raised revenue outlook and the launch of the AdvanceAD-Tx test. Long-term total shareholder returns remind us the journey has seen ups and downs, with a 3-year total return of 70.6%. The 5-year figure remains in negative territory.

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With Castle Biosciences riding a wave of recent product launches and upgraded guidance, the big question now is whether the remarkable rally leaves room for further upside or if the market has already priced in future growth.

Most Popular Narrative: 4.2% Undervalued

Castle Biosciences’ most followed narrative points to a fair value slightly ahead of the recent closing price, suggesting there might be modest upside left. The analysts’ consensus scenario assumes several strategic initiatives will play a key role in driving future growth, and these underpin the latest valuation estimate.

"Castle's rapid expansion of its test menu, especially into high-growth, underpenetrated indications like gastrointestinal diagnostics (TissueCypher) and new pipeline areas such as atopic dermatitis, positions the company to tap into substantially larger patient populations and diversify revenue streams, directly supporting long-term revenue growth."

Read the complete narrative.

Want to know what powers this valuation call? The secret ingredient is a combination of ambitious growth targets, aggressive margin shifts, and a pricing approach that differs from the sector average. Get ready to uncover the quantitative drivers that make this narrative stand out from the crowd.

Result: Fair Value of $35.63 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, challenges such as reimbursement setbacks and rising competition could quickly shift the outlook. This may put pressure on margins and dampen future growth expectations.

Find out about the key risks to this Castle Biosciences narrative.

Build Your Own Castle Biosciences Narrative

If you have a different perspective or enjoy hands-on research, you can dig into the numbers and build your own view of Castle Biosciences in under three minutes. Do it your way

A great starting point for your Castle Biosciences research is our analysis highlighting 1 key reward and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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