Castle Biosciences, Inc. (NASDAQ:CSTL) just released its latest first-quarter results and things are looking bullish. The results overall were pretty good, with revenues of US$73m exceeding expectations and statutory losses coming in at justUS$0.09 per share, some 73% below what the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Castle Biosciences

Following the latest results, Castle Biosciences' eight analysts are now forecasting revenues of US$260.6m in 2024. This would be a modest 4.0% improvement in revenue compared to the last 12 months. Per-share losses are expected to explode, reaching US$1.59 per share. Before this latest report, the consensus had been expecting revenues of US$237.6m and US$2.24 per share in losses. So it seems there's been a definite increase in optimism about Castle Biosciences' future following the latest consensus numbers, with a very promising decrease in the loss per share forecasts in particular.

There was no major change to the consensus price target of US$34.00, perhaps suggesting that the analysts remain concerned about ongoing losses despite the improved earnings and revenue outlook. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Castle Biosciences at US$40.00 per share, while the most bearish prices it at US$28.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Castle Biosciences' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 5.3% growth on an annualised basis. This is compared to a historical growth rate of 36% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.7% annually. Factoring in the forecast slowdown in growth, it seems obvious that Castle Biosciences is also expected to grow slower than other industry participants.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Castle Biosciences analysts - going out to 2026, and you can see them free on our platform here.

Even so, be aware that Castle Biosciences is showing 3 warning signs in our investment analysis , you should know about...

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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.