📊 CSTL Key Takeaways
Is Castle Biosciences Inc. (CSTL) a Good Investment?
Castle Biosciences demonstrates strong revenue growth and excellent liquidity, but is severely unprofitable with negative operating and net margins that have dramatically deteriorated year-over-year. The company is burning through shareholder equity despite generating positive free cash flow, indicating unsustainable unit economics in its medical laboratory services business.
Castle Biosciences shows mixed fundamentals: revenue is still growing and the company generates positive operating cash flow and free cash flow, but profitability has weakened sharply with very low gross margin and a return to net losses. The balance sheet is strong with high liquidity, substantial cash, and minimal debt, which supports resilience, but growth quality looks weaker until margins and earnings stabilize.
Why Buy Castle Biosciences Inc. Stock? CSTL Key Strengths
- Strong liquidity position with 5.26x current ratio and $116.7M cash reserves
- Positive free cash flow of $28.3M provides runway despite losses
- Revenue growth of 3.7% YoY shows market demand for services
- Low leverage with debt/equity of 0.02x provides financial flexibility
- Strong balance sheet with $116.73M of cash, very low long-term debt, and debt/equity of just 0.02x
- Healthy liquidity profile with current ratio of 5.26x and quick ratio of 5.11x
- Positive operating cash flow of $64.35M and free cash flow of $28.33M despite reported net losses
CSTL Stock Risks: Castle Biosciences Inc. Investment Risks
- Gross margin of only 5.7% is critically low for a services business, indicating severe cost structure problems
- Net loss of $24.2M with deteriorating profitability (-232.4% YoY) shows worsening operational performance
- Operating margin of -12.4% with negative interest coverage (-2518.2x) indicates inability to cover fixed costs
- Unsustainable business model: positive FCF masks underlying operational losses that will deplete equity over time
- Profitability deteriorated materially, with net income down 232.4% YoY and operating margin at -12.4%
- Gross margin is extremely weak at 5.7%, raising concerns about cost structure and earnings durability
- Revenue growth of 3.7% YoY is modest relative to the margin pressure, suggesting weaker growth quality
Key Metrics to Watch
- Gross margin expansion - critical threshold is reaching 15%+ to support operations
- Path to operating profitability and timeline to positive EBITDA
- Operating expense reduction as percentage of revenue
- Cash burn rate and runway given current negative profitability trends
- Gross margin and operating margin trend
- Operating cash flow and free cash flow consistency
Castle Biosciences Inc. (CSTL) Financial Metrics & Key Ratios
💡 AI Analyst Insight
Strong liquidity with a 5.26x current ratio provides a solid financial cushion.
CSTL Profit Margin, ROE & Profitability Analysis
CSTL vs Healthcare Sector: How Castle Biosciences Inc. Compares
How Castle Biosciences Inc. compares to Healthcare sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Castle Biosciences Inc. Stock Overvalued? CSTL Valuation Analysis 2026
Based on fundamental analysis, Castle Biosciences Inc. has mixed fundamental signals relative to the Healthcare sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Castle Biosciences Inc. Balance Sheet: CSTL Debt, Cash & Liquidity
CSTL Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Castle Biosciences Inc.'s revenue has grown significantly by 266% over the 5-year period, indicating strong business expansion. The most recent EPS of $-2.14 indicates the company is currently unprofitable.
CSTL Revenue Growth, EPS Growth & YoY Performance
CSTL Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $83.0M | -$501.0K | $-0.02 |
| Q2 2025 | $86.2M | -$2.5M | $0.15 |
| Q1 2025 | $73.0M | -$2.5M | $-0.09 |
| Q3 2024 | $61.5M | $2.3M | $0.08 |
| Q2 2024 | $50.1M | -$2.5M | $0.22 |
| Q1 2024 | $42.0M | -$2.5M | $-0.09 |
| Q3 2023 | $37.0M | -$1.6M | $-0.26 |
| Q2 2023 | $34.8M | -$1.6M | $-0.06 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Castle Biosciences Inc. Dividends, Buybacks & Capital Allocation
CSTL SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Castle Biosciences Inc. (CIK: 0001447362)
📋 Recent SEC Filings
❓ Frequently Asked Questions about CSTL
What is the AI rating for CSTL?
Castle Biosciences Inc. (CSTL) has a Combined AI Rating of SELL from Claude (SELL) and ChatGPT (HOLD) with 78% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are CSTL's key strengths?
Claude: Strong liquidity position with 5.26x current ratio and $116.7M cash reserves. Positive free cash flow of $28.3M provides runway despite losses. ChatGPT: Strong balance sheet with $116.73M of cash, very low long-term debt, and debt/equity of just 0.02x. Healthy liquidity profile with current ratio of 5.26x and quick ratio of 5.11x.
What are the risks of investing in CSTL?
Claude: Gross margin of only 5.7% is critically low for a services business, indicating severe cost structure problems. Net loss of $24.2M with deteriorating profitability (-232.4% YoY) shows worsening operational performance. ChatGPT: Profitability deteriorated materially, with net income down 232.4% YoY and operating margin at -12.4%. Gross margin is extremely weak at 5.7%, raising concerns about cost structure and earnings durability.
What is CSTL's revenue and growth?
Castle Biosciences Inc. reported revenue of $344.2M.
Does CSTL pay dividends?
Castle Biosciences Inc. does not currently pay dividends.
Where can I find CSTL SEC filings?
Official SEC filings for Castle Biosciences Inc. (CIK: 0001447362) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is CSTL's EPS?
Castle Biosciences Inc. has a diluted EPS of $-0.83.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is CSTL a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, Castle Biosciences Inc. has a SELL rating with 78% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is CSTL stock overvalued or undervalued?
Valuation metrics for CSTL: ROE of -5.1% (sector avg: 15%), net margin of -7.0% (sector avg: 12%). Compare these metrics with sector averages to assess valuation.
Should I buy CSTL stock in 2026?
Our dual AI analysis gives Castle Biosciences Inc. a combined SELL rating for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is CSTL's free cash flow?
Castle Biosciences Inc.'s operating cash flow is $64.3M, with capital expenditures of $36.0M. FCF margin is 8.2%.
How does CSTL compare to other Healthcare stocks?
Vs Healthcare sector averages: Net margin -7.0% (avg: 12%), ROE -5.1% (avg: 15%), current ratio 5.26 (avg: 2).