Castle Biosciences (NASDAQ:CSTL) Releases Quarterly Earnings Results, Beats Estimates By $0.37 EPS

Castle Biosciences (NASDAQ:CSTL) posted its quarterly earnings data on Thursday. The company reported ($0.07) earnings per share for the quarter, topping the consensus estimate of ($0.44) by $0.37, FiscalAI reports. The company had revenue of $99.86 million for the quarter, compared to analysts’ expectations of $86.24 million. Castle Biosciences had a negative net margin of 3.78% and a negative return on equity of 2.77%.

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 Trading Up 10.1%

Shares of CSTL traded up $2.71 during trading hours on Friday, hitting $29.50. The company had a trading volume of 569,934 shares, compared to its average volume of 391,496. The firm has a market cap of $894.77 million, a P/E ratio of -67.18 and a beta of 1.00. The stock’s 50 day moving average price is $22.61 and its 200 day moving average price is $26.51. The company has a quick ratio of 6.53, a current ratio of 6.75 and a debt-to-equity ratio of 0.02. Castle Biosciences has a 52-week low of $14.59 and a 52-week high of $44.28.

Wall Street Analyst Weigh In

A number of analysts have recently issued reports on CSTL shares. Weiss Ratings downgraded shares of Castle Biosciences from a “sell (d-)” rating to a “sell (e+)” rating in a report on Monday, June 1st. Robert W. Baird set a $36.00 target price on Castle Biosciences in a research note on Friday. KeyCorp set a $35.00 target price on Castle Biosciences in a research note on Friday, May 29th. BTIG Research lowered their price target on Castle Biosciences from $50.00 to $40.00 and set a “buy” rating on the stock in a research report on Wednesday, May 13th. Finally, Roth Capital began coverage on Castle Biosciences in a research note on Wednesday, June 24th. They set a “buy” rating and a $40.00 price target for the company. One equities research analyst has rated the stock with a Strong Buy rating, seven have assigned a Buy rating, one has issued a Hold rating and one has issued a Sell rating to the company’s stock. According to data from MarketBeat.com, the stock presently has an average rating of “Moderate Buy” and an average target price of $41.43.

Insider Activity

In related news, insider Derek J. Maetzold sold 3,622 shares of the firm’s stock in a transaction that occurred on Monday, July 27th. The stock was sold at an average price of $24.16, for a total transaction of $87,507.52. Following the transaction, the insider directly owned 11,812 shares in the company, valued at $285,377.92. This trade represents a 23.47% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, COO Kristen M. Oelschlager sold 8,586 shares of Castle Biosciences stock in a transaction that occurred on Wednesday, July 1st. The stock was sold at an average price of $24.42, for a total value of $209,670.12. Following the completion of the transaction, the chief operating officer directly owned 21,874 shares in the company, valued at $534,163.08. This trade represents a 28.19% 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 have sold a total of 55,025 shares of company stock valued at $1,252,199 over the last 90 days. 6.10% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

Several hedge funds have recently made changes to their positions in CSTL. Federated Hermes Inc. purchased a new stake in Castle Biosciences during the 4th quarter valued at $26,000. Kemnay Advisory Services Inc. purchased a new position in shares of Castle Biosciences in the fourth quarter valued at about $35,000. Persistent Asset Partners Ltd bought a new position in shares of Castle Biosciences during the fourth quarter valued at about $96,000. Russell Investments Group Ltd. boosted its holdings in shares of Castle Biosciences by 63.7% during the third quarter. Russell Investments Group Ltd. now owns 2,508 shares of the company’s stock worth $57,000 after purchasing an additional 976 shares during the period. Finally, Jones Financial Companies Lllp boosted its holdings in shares of Castle Biosciences by 10,592.0% during the first quarter. Jones Financial Companies Lllp now owns 2,673 shares of the company’s stock worth $54,000 after purchasing an additional 2,648 shares during the period. 92.60% of the stock is owned by hedge funds and other institutional investors.

Key Stories Impacting Castle Biosciences

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

• Positive Sentiment: Revenue and earnings beat expectations: Second-quarter revenue reached approximately $103.5 million, up 20.1% year over year and well above analyst estimates near $86 million–$88 million. The adjusted loss of $0.07 per share was substantially narrower than the consensus loss of roughly $0.41–$0.44. Castle Biosciences Reports Second Quarter 2026 Results
• Positive Sentiment: Full-year outlook raised: Castle projected 2026 revenue of $365 million to $375 million, above the prior consensus estimate of approximately $353.2 million. The improved outlook supports expectations for continued test volume growth and was a key catalyst for the stronger stock performance. Castle Biosciences Lifts 2026 Outlook After Q2 Growth
• Positive Sentiment: Improving operating trends and liquidity: Gross profit increased to $79.8 million, while the operating loss narrowed to about $3.1 million. Castle generated $15.2 million in operating cash flow and ended the quarter with $62.1 million in cash, providing funding for commercial expansion and product development. Castle Biosciences Q2 2026 Earnings Call Transcript
• Neutral Sentiment: Profitability remains a concern: Despite the earnings beat, Castle posted a net loss of approximately $2.1 million and continues to report negative net margins. Investors will likely focus on whether revenue growth can translate into sustained profitability.
• Negative Sentiment: Insider selling adds a modest overhang: Chief Executive Officer Derek Maetzold and other executives have reported repeated stock sales in recent months. The transactions were conducted under pre-arranged Rule 10b5-1 plans, which reduces their signal value, but the absence of reported insider purchases may temper enthusiasm. Castle Biosciences Stock Rises on Q2 2026 Earnings

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.