Castle Biosciences (CSTL) PT Lowered to $40 at BTIG

BTIG analyst Sung Ji Nam lowered the price target on Castle Biosciences (NASDAQ: CSTL) to $40.00 (from $50.00) while maintaining a Buy rating.

The analyst comments "CSTL delivered a solid 10% revenue beat in Q1 on the back of robust +58% and +16% Y/Y volume growth in TissueCypher and its DecisionDxMelanoma test, respectively, both ahead of our forecast. We are encouraged that CSTL raised its 2026 revenue guide, and CSTL now expects its TissueCypher test to approach 50% volume growth for the year. CSTL is seeing positive activity build with its new Atopic Derm test, which we think meets an unmet clinical need. CSTL sees multiple areas to expand investments into its business this year, including in sales, marketing and new product development, and we did bump up our OPEX estimates for the year. We remain hopeful that the company can regain Medicare coverage of its SCC test, and we expect to get an update from CMS later this year. Shares of CSTL now trade at less than 1x our 2026 revenue estimate of $351M, well below historical peers of ~3-7x. We think asymmetric upside remains in shares of CSTL, SCC has been priced out of the stock for some time now, and we think shares of CSTL could benefit further from multiple expansion. We reiterate our Buy rating and trim our PT from $50 to $40."

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