Castle Biosciences (NASDAQ:CSTL) Posts Earnings Results, Beats Expectations By $0.34 EPS

Castle Biosciences (NASDAQ:CSTL) announced its earnings results on Thursday. The company reported ($0.07) earnings per share (EPS) for the quarter, topping the consensus estimate of ($0.41) by $0.34, FiscalAI reports. The company had revenue of $99.86 million during the quarter, compared to analyst estimates of $86.23 million. Castle Biosciences had a negative net margin of 5.43% and a negative return on equity of 4.16%.

Here are the key takeaways from Castle Biosciences’ conference call:

• Revenue guidance was raised: Second-quarter revenue reached $103.5 million, up 20% year over year, prompting Castle to increase its 2026 revenue outlook to $365 million–$375 million from $345 million–$355 million.
• TissueCypher remained the primary growth engine: Test reports rose 63% year over year to 14,988, and management now expects full-year volume growth of approximately 50%–52%; the company cited continued physician adoption and substantial remaining market opportunity.
• AdvanceAD-Tx commercialization advanced: The test generated more than 1,000 orders in the quarter, received a unanimous recommendation for a $36.75 CMS crosswalk rate, and showed strong real-world treatment-concordance results, supporting a broader commercial launch over time.
• Profitability was pressured by investment spending: Gross margin declined to 74.9% from 77.3%, while the company posted a $2.1 million net loss versus $4.5 million of net income a year earlier, reflecting higher laboratory, personnel, sales, marketing, and R&D costs.
• Melanoma growth remained steady but moderated: DecisionDx-Melanoma report volume increased 3% year over year, below typical seasonal sequential growth, as the sales force adapted to promoting three products; management nevertheless maintained its expectation for mid- to high-single-digit full-year volume growth.

Castle Biosciences Stock Up 4.5%

CSTL stock opened at $28.00 on Friday. The stock has a market capitalization of $849.24 million, a price-to-earnings ratio of -42.42 and a beta of 1.00. The company has a 50-day moving average of $22.76 and a two-hundred day moving average of $26.52. Castle Biosciences has a 52-week low of $14.59 and a 52-week high of $44.28. The company has a debt-to-equity ratio of 0.02, a current ratio of 6.75 and a quick ratio of 6.53.

Insider Transactions at Castle Biosciences

In other Castle Biosciences news, COO Kristen M. Oelschlager sold 8,587 shares of Castle Biosciences stock in a transaction that occurred on Tuesday, June 16th. The stock was sold at an average price of $20.71, for a total value of $177,836.77. Following the transaction, the chief operating officer directly owned 30,460 shares of the company’s stock, valued at $630,826.60. The trade was a 21.99% decrease in their position. The sale was disclosed in a filing with the SEC, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Derek J. Maetzold sold 6,214 shares of the company’s stock in a transaction that occurred on Thursday, May 7th. The stock was sold at an average price of $22.15, for a total value of $137,640.10. Following the transaction, the insider owned 21,479 shares of the company’s stock, valued at approximately $475,759.85. This trade represents a 22.44% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 55,025 shares of company stock worth $1,252,199 over the last quarter. 6.10% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On Castle Biosciences

Several hedge funds and other institutional investors have recently modified their holdings of CSTL. RTW Investments LP bought a new position in Castle Biosciences during the fourth quarter worth $82,283,000. Summit Partners Public Asset Management LLC bought a new stake in Castle Biosciences in the 3rd quarter valued at $9,108,000. Wellington Management Group LLP bought a new stake in Castle Biosciences in the 4th quarter valued at $8,502,000. Millennium Management LLC grew its position in Castle Biosciences by 34.2% in the 3rd quarter. Millennium Management LLC now owns 575,089 shares of the company’s stock worth $13,095,000 after purchasing an additional 146,692 shares during the last quarter. Finally, Bridgeway Capital Management LLC increased its holdings in shares of Castle Biosciences by 334.8% during the 3rd quarter. Bridgeway Capital Management LLC now owns 177,180 shares of the company’s stock worth $4,034,000 after purchasing an additional 136,430 shares during the period. Institutional investors and hedge funds own 92.60% of the company’s stock.

More Castle Biosciences News

Here are the key news stories impacting Castle Biosciences this week:

• Positive Sentiment: Revenue significantly exceeded expectations: Second-quarter revenue was approximately $103.5 million, up 20.1% year over year and above analyst estimates near $86 million-$88 million. Gross profit increased 16.5% to $79.8 million. Castle Biosciences Reports Second Quarter 2026 Results
• Positive Sentiment: Loss was narrower than expected: Adjusted loss was $0.07 per share, compared with the consensus estimate of a $0.41-$0.44 loss. The operating loss narrowed to $3.1 million, supporting the view that improving scale may help profitability over time. Castle Biosciences Reports Q2 Loss, Tops Revenue Estimates
• Positive Sentiment: Full-year outlook was raised: Castle now expects 2026 revenue of $365 million to $375 million, above the approximately $353.2 million analyst consensus. The higher outlook strengthens the growth narrative and likely provided the main catalyst for the stock’s advance. Castle Biosciences Lifts 2026 Outlook After Q2 Growth
• Neutral Sentiment: Liquidity remains solid: The company generated $15.2 million in operating cash flow and ended the quarter with $62.1 million in cash, while maintaining relatively low leverage. However, capital spending was $8.7 million and net profitability has not yet been achieved. Castle Biosciences Q2 2026 Earnings Call Transcript
• Negative Sentiment: Insider selling remains a risk signal: Chief Executive Officer Derek Maetzold and other executives have reported stock sales, with the transactions conducted under pre-arranged Rule 10b5-1 plans. While these sales do not necessarily indicate deteriorating business conditions, the absence of reported insider purchases may temper investor enthusiasm.

Analyst Ratings Changes

Several equities research analysts have issued reports on the company. BTIG Research dropped their price target on Castle Biosciences from $50.00 to $40.00 and set a “buy” rating for the company in a research note on Wednesday, May 13th. KeyCorp set a $35.00 price objective on Castle Biosciences in a research report on Friday, May 29th. Zacks Research cut Castle Biosciences from a “strong-buy” rating to a “hold” rating in a report on Tuesday, May 26th. Weiss Ratings downgraded Castle Biosciences from a “sell (d-)” rating to a “sell (e+)” rating in a research report on Monday, June 1st. Finally, Wall Street Zen raised Castle Biosciences from a “sell” rating to a “hold” rating in a research note on Saturday. One equities research analyst has rated the stock with a Strong Buy rating, seven have issued a Buy rating, one has issued a Hold rating and one has given a Sell rating to the stock. According to data from MarketBeat, Castle Biosciences has an average rating of “Moderate Buy” and an average price target of $41.43.

About Castle Biosciences

Castle Biosciences, Inc is a molecular diagnostics company specializing in the development and commercialization of prognostic and diagnostic tests for patients with dermatologic conditions. The company’s proprietary portfolio of genomic assays is designed to improve risk assessment and guide clinical decision-making for individuals with skin cancers and other skin-related diseases. By combining genomic data with advanced statistical algorithms, Castle Biosciences seeks to provide actionable insights that help physicians tailor treatment plans and monitoring strategies.

The company’s flagship test, DecisionDx-Melanoma, evaluates the probability of metastasis in patients diagnosed with cutaneous melanoma, supporting more personalized surveillance and therapeutic approaches.