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Canaccord Sees Opportunity in Castle Bioscience’s Stock Dip (NASDAQ: CSTL)

Analyst Team trader
Updated 9 Jul 2024

Having fallen 15% in the past week, Castle Biosciences stock (NASDAQ: CSTL) has been flagged by one analyst as representing opportunity on the pullback. The move comes on the heels of a final non-coverage decision announced on July 4 by the Palmetto MolDX program for Castle’s DecisionDx-SCC test, a proprietary genomic test designed for cutaneous squamous cell carcinoma (CSCC).

Trading a fraction below $18, CSTL stock is near the mid-range of its 52-week highs and lows of $25.91 and $12.07, respectively.

Canaccord, a notable investment firm, reaffirmed their positive stance on Castle Biosciences, recommending a strong buy and a $35 price target for the company's shares.

Despite the coverage setback with the MolDX program and an anticipated similar decision by Novitas Solutions for the final Local Coverage Determination (LCD), Canaccord advocates purchasing Castle Biosciences on this dip. The firm perceives these recent non-coverage events as opportunities that pave the way for a re-evaluation of the company’s underlying strong fundamentals, including robust core revenue growth and solid gross margins.

Castle Biosciences at a Glance

Based in Friendswood, Texas, Castle Biosciences operates in the Diagnostics & Research sector within the Healthcare industry. The molecular diagnostics company provides specialised testing solutions for the diagnosis and management of dermatologic cancers, other disease states, and mental health conditions. Its tests include DecisionDx-Melanoma for melanoma risk stratification, and they have also delved into pharmacogenomics with IDgenetix used for major psychiatric disorders.

Financially, Castle Biosciences holds a market capitalisation of $496 million, and although they reported a net income loss to common shareholders of approximately $30.8 million, the firm posted a total revenue of $250.72 million.


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Castle Bioscienses remains steadfast in its goal to provide tailored diagnostic solutions, and with an ongoing emphasis on expanding its portfolio and entering new markets, it continues to be a company to watch in the evolving field of molecular diagnostics.

Canaccord's reiteration serves as a marker of confidence in Castle's long-term trajectory, encouraging investors to look beyond the immediate coverage news to the more comprehensive outlook of the company's promising fundamentals and growth potential.

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The AskTraders Analyst Team features experts in technical and fundamental analysis, as well as traders specializing in stocks, forex, and cryptocurrency.