Nasdaq-Listed Companies

Recent 4.3% pullback isn't enough to hurt long-term Castle Biosciences (NASDAQ:CSTL) shareholders, they're still up 18% over 1 year

Castle Biosciences, Inc. (NASDAQ:CSTL) shareholders might be concerned after seeing the share price drop 18% in the last month. But at least the stock is up over the last year. In that time, it is up 18%, which isn't bad, but is below the market return of 30%.

Since the long term performance has been good but there's been a recent pullback of 4.3%, let's check if the fundamentals match the share price.

Because Castle Biosciences made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually expect strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last year Castle Biosciences saw its revenue grow by 25%. That's a fairly respectable growth rate. The share price gain of 18% seems pretty muted, considering the growth. Arguably, the market (previously) expected stronger growth from the company. But this one could be a worth watching - a maiden profit would likely catch the market's attention.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

earnings-and-revenue-growth
NasdaqGM:CSTL Earnings and Revenue Growth October 6th 2021

This free interactive report on Castle Biosciences' balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

We're happy to report that Castle Biosciences are up 18% over the year. Unfortunately this falls short of the market return of around 30%. The last three months haven't been great for shareholder returns, since the share price has trailed the market by 8.1% in the last three months. But a weak quarter certainly doesn't diminish the longer-term achievements of the business. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that Castle Biosciences is showing 2 warning signs in our investment analysis , you should know about...

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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