GET DAILY SIGNALSCastle Biosciences (CSTL) Delivers +24% Revenue Growth in Q3
Key Takeaways
- Castle Biosciences reported third quarter 2026 revenue of $102.9 million, up 24% year over year and ahead of consensus estimates of roughly $92 million.
- Diluted net loss per share was $0.13, narrower than the consensus expectation of a roughly $0.35–$0.38 loss per share.
- Full-year 2026 revenue guidance was raised to $385 million–$395 million, up from the prior range of $365 million–$375 million.
- TissueCypher test volume climbed 47% year over year, the primary driver of the quarter's top-line growth.
- Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) was positive at $12.7 million, with management reiterating expectations for positive full-year 2026 and full-year 2027 Adjusted EBITDA.
- For more detail on this ticker's Major News, Today's Price Move, Price Targets, and Forecast, explore the additional pages available for CSTL.
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Why This Quarter Matters
Castle Biosciences focuses on molecular diagnostics for dermatologic and gastrointestinal conditions, with DecisionDx-Melanoma and TissueCypher as its main revenue drivers. The results provide a useful check on whether growth can extend beyond the melanoma franchise while the company moves closer to consistent profitability. The stock had trailed the broader market earlier in the year, so this report served as an important test of sentiment. I paid particular attention to TissueCypher momentum, margin stability, and any guidance updates. The numbers give a clear view of commercial progress, cost control, and the balance sheet's capacity to support further development.
Breaking Down the Reported Numbers
For the third quarter ended September 30, 2026, Castle Biosciences posted total revenue of $102.9 million, a 24% increase from $83.0 million a year earlier and above the roughly $92 million consensus. The main contributor was TissueCypher test volume, which grew 47% year over year to 15,574 reports. DecisionDx-Melanoma produced 10,177 reports, its fifth straight quarter above the 10,000 mark. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
The company recorded a net loss of $4.1 million, or $0.13 per diluted share, versus a $0.5 million loss, or $0.02 per share, in the prior-year period. The loss per share came in better than the expected $0.35–$0.38 range. Adjusted EBITDA reached $12.7 million, up from $9.2 million. Gross margin remained at 75%, with adjusted gross margin at 77%.
Management lifted full-year 2026 revenue guidance to $385 million–$395 million, a $20 million increase at the midpoint, and repeated its outlook for positive Adjusted EBITDA in the fourth quarter, full year 2026, and full year 2027. Cash and marketable securities stood at approximately $278 million at quarter-end.
Market Reaction and Sentiment
Shares of CSTL moved modestly higher in after-hours trading after the release. Investors appeared to balance the revenue beat and raised guidance against a wider net loss compared with last year. The stronger top line, the sharp rise in TissueCypher volume, and the guidance increase stood out as the key positives. Management noted on the call that TissueCypher penetration sits around 15% of eligible procedures, pointing to meaningful room for further adoption. Areas of focus included gross margin sustainability, higher operating expenses, and the near-term path for DecisionDx-Melanoma volumes.
What to Watch Going Forward
The raised full-year revenue outlook points to ongoing strength in the core business rather than new contributors. TissueCypher should remain the main growth driver, and I’m watching closely how volumes expand among current clinicians and through new ones in coming quarters. Gross margin trends will also matter, with management expecting adjusted gross margin to stay relatively steady thanks to lab efficiencies and a stable test mix. Operating expense growth in sales, marketing, and research and development deserves attention as the company invests in expansion and its pipeline. Reimbursement progress and new clinical data for TissueCypher and AdvanceAD-Tx could support longer-term adoption, while the roughly $278 million cash position offers flexibility without near-term financing needs.
Using AI Tools in My Research Process
When evaluating names like this one, I often turn to Tickeron’s AI Screener to filter healthcare and diagnostics stocks by technical patterns, fundamentals, and performance metrics. It provides a structured way to surface relevant signals across the sector and compare opportunities more efficiently than manual reviews. The tool has become a regular part of my workflow for identifying context around individual earnings reports.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
CSTL in upward trend: 10-day moving average crossed above 50-day moving average on October 30, 2026
The 10-day moving average for CSTL crossed bullishly above the 50-day moving average on October 30, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In 12 of 13 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 90%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 26, 2026. You may want to consider a long position or call options on CSTL as a result. In 75 of 90 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 83%.
The Moving Average Convergence Divergence (MACD) for CSTL just turned positive on October 27, 2026. Looking at past instances where CSTL's MACD turned positive, the stock continued to rise in 30 of 37 cases over the following month. The odds of a continued upward trend are 81%.
Following a +2.32% 3-day Advance, the price is estimated to grow further. Considering data from situations where CSTL advanced for three days, in 232 of 297 cases, the price rose further within the following month. The odds of a continued upward trend are 78%.
The Aroon Indicator entered an Uptrend today. In 202 of 227 cases where CSTL Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 89%.
Bearish Trend Analysis
The 10-day RSI Indicator for CSTL moved out of overbought territory on October 30, 2026. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 37 similar instances where the indicator moved out of overbought territory. In 29 of the 37 cases, the stock moved lower in the following days. This puts the odds of a move lower at 78%.
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In 52 of 70 cases where CSTL's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are 74%.
CSTL moved below its 50-day moving average on November 05, 2026 date and that indicates a change from an upward trend to a downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where CSTL declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 79%.
CSTL broke above its upper Bollinger Band on October 28, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Fundamental Analysis (Ratings)
The Tickeron Valuation Rating of 24 (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (2.223) is normal, around the industry mean (66.084). P/E Ratio (-53.438) is within average values for comparable stocks, (2.723). Projected Growth (PEG Ratio) (0.000) is also within normal values, averaging (3.473). Dividend Yield (0.000) settles around the average of (0.002) among similar stocks. P/S Ratio (2.947) is also within normal values, averaging (9.775).
The Tickeron Price Growth Rating for this company is 39 (best 1 - 100 worst), indicating steady price growth. CSTL’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Seasonality Score of 50 (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron PE Growth Rating for this company is 87 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron SMR rating for this company is 92 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. CSTL’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 86, placing this stock worse than average.
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General Information
is a commercial-stage dermatological cancer company, which engages in the provision of genomic information for physicians and patients.
Industry MedicalSpecialties
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