Fact based stock research
Castle Biosciences (NasdaqGM:CSTL)
US14843C1053
How to read the free ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Castle Biosciences stock research in summary
ANALYSIS: With an Obermatt Combined Rank of 19 (worse than 81% compared with investment alternatives), Castle Biosciences (Health Care Services, USA) shares have lower financial characteristics compared with similar stocks. Shares of Castle Biosciences are low in value (priced high) with a consolidated Value Rank of 5 (worse than 95% of alternatives) and show below-average growth (Growth Rank of 45) but are safely financed (Safety Rank of 73), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 19, is a sell recommendation based on Castle Biosciences's financial characteristics. As the company Castle Biosciences's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 5) and low growth (Obermatt Growth Rank of 45), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 73) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
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360° Viewnew| Country | USA |
| Industry | Health Care Services |
| Index | NASDAQ |
| Size class | X-Small |
14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.
Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.
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Review the performance ranks of the individual metrics that form each investment strategy.
Research History: Castle Biosciences
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 44 |
|
26 |
|
35 |
|
5 |
|
| GROWTH | ||||||||
| GROWTH | 60 |
|
55 |
|
11 |
|
45 |
|
| SAFETY | ||||||||
| SAFETY | 83 |
|
84 |
|
73 |
|
73 |
|
| SENTIMENT | ||||||||
| SENTIMENT | n/a |
|
47 |
|
69 |
|
new |
|
| 360° VIEW | ||||||||
| 360° VIEW | n/a |
|
53 |
|
39 |
|
new |
|
Combined financial peformance in Detail
ANALYSIS: With an Obermatt Combined Rank of 19 (worse than 81% compared with investment alternatives), Castle Biosciences (Health Care Services, USA) shares have lower financial characteristics compared with similar stocks. Shares of Castle Biosciences are low in value (priced high) with a consolidated Value Rank of 5 (worse than 95% of alternatives) and show below-average growth (Growth Rank of 45) but are safely financed (Safety Rank of 73), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 19, is a sell recommendation based on Castle Biosciences's financial characteristics. As the company Castle Biosciences's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 5) and low growth (Obermatt Growth Rank of 45), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 73) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 44 |
|
26 |
|
35 |
|
5 |
|
| GROWTH | ||||||||
| GROWTH | 60 |
|
55 |
|
11 |
|
45 |
|
| SAFETY | ||||||||
| SAFETY | 83 |
|
84 |
|
73 |
|
73 |
|
| COMBINED | ||||||||
| COMBINED | 64 |
|
55 |
|
16 |
|
19 |
|
Value Metrics in Detail
ANALYSIS: With an Obermatt Value Rank of 5 (worse than 95% compared with alternatives), Castle Biosciences shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Castle Biosciences. Price-to-Sales is 5 which means that the stock price compared with what market professionals expect for future profits is higher than 95% of comparable companies, indicating a low value concerning Castle Biosciences's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 46, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Castle Biosciences. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 7 and Dividend Yield, which is lower than 99% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 5, is a sell recommendation based on Castle Biosciences's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Castle Biosciences? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Castle Biosciences? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Castle Biosciences may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more
| VALUE METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| PRICE VS. REVENUES (P/S) | ||||||||
| PRICE VS. REVENUES (P/S) | 42 |
|
3 |
|
12 |
|
5 |
|
| PRICE VS. PROFITS (P/E) | ||||||||
| PRICE VS. PROFITS (P/E) | 29 |
|
24 |
|
78 |
|
7 |
|
| PRICE VS. CAPITAL (Market-to-Book) | ||||||||
| PRICE VS. CAPITAL (Market-to-Book) | 65 |
|
59 |
|
80 |
|
46 |
|
| DIVIDEND YIELD | ||||||||
| DIVIDEND YIELD | 1 |
|
1 |
|
1 |
|
1 |
|
| CONSOLIDATED RANK: VALUE | ||||||||
| CONSOLIDATED RANK: VALUE | 44 |
|
26 |
|
35 |
|
5 |
|
Growth Metrics in Detail
ANALYSIS: With an Obermatt Growth Rank of 45 (better than 45% compared with alternatives), Castle Biosciences shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Castle Biosciences. Profit Growth has a rank of 94, which means that currently professionals expect the company to grow its profits more than 94% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 91 (above 91% of alternative investments). But Sales Growth has a below the median rank of 4, which means that, currently, professionals expect the company to grow less than 96% of its competitors, and Capital Growth also has a lower rank of 1. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 45, is a hold recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Castle Biosciences. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more
| GROWTH METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 64 |
|
74 |
|
27 |
|
4 |
|
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | n/a |
|
6 |
|
32 |
|
94 |
|
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | n/a |
|
95 |
|
18 |
|
1 |
|
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 66 |
|
21 |
|
19 |
|
91 |
|
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 60 |
|
55 |
|
11 |
|
45 |
|
Safety Metrics in Detail
ANALYSIS: With an Obermatt Safety Rank of 73 (better than 73% compared with alternatives), the company Castle Biosciences has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Castle Biosciences is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators where two out of three are above average for Castle Biosciences.Leverage is at 92, meaning the company has a below-average debt-to-equity ratio. It has less debt than 92% of its competitors.Refinancing is at a rank of 88, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 88% of its competitors. Liquidity is at 4, meaning that the company generates less profit to service its debt than 96% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 73 (better than 73% compared with alternatives), Castle Biosciences has a financing structure that is safer than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. Investors should compare Obermatt’s Value, Growth, and Sentiment Ranks before deciding. They may also want to investigate why cash flows are expected to be low, making debt service for Castle Biosciences more challenging. ...read more
| SAFETY METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 86 |
|
90 |
|
94 |
|
92 |
|
| REFINANCING | ||||||||
| REFINANCING | 66 |
|
94 |
|
92 |
|
88 |
|
| LIQUIDITY | ||||||||
| LIQUIDITY | 41 |
|
15 |
|
1 |
|
4 |
|
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 83 |
|
84 |
|
73 |
|
73 |
|
Sentiment Metrics in Detail
| SENTIMENT | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| ANALYST OPINIONS | ||||||||
| ANALYST OPINIONS | n/a |
|
97 |
|
93 |
|
new |
|
| OPINIONS CHANGE | ||||||||
| OPINIONS CHANGE | n/a |
|
26 |
|
50 |
|
new |
|
| PRO HOLDINGS | ||||||||
| PRO HOLDINGS | n/a |
|
3 |
|
39 |
|
new |
|
| MARKET PULSE | ||||||||
| MARKET PULSE | n/a |
|
72 |
|
47 |
|
new |
|
| CONSOLIDATED RANK: SENTIMENT | ||||||||
| CONSOLIDATED RANK: SENTIMENT | n/a |
|
47 |
|
69 |
|
new |
|
Free stock analysis by the purely fact based Obermatt Method for Castle Biosciences from November 14, 2024.
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