Leerink Partners analyst Puneet Souda has maintained their bullish stance on CSTL stock, giving a Buy rating yesterday.
Puneet Souda’s Buy rating for Castle Biosciences is anchored on a robust performance of the company’s key products, particularly the DecisionDx-SCC test. This test exhibited a significant year-over-year growth in volume, surpassing both the consensus estimate and Leerink Partners’ own forecast. Moreover, the company’s overall revenues exceeded expectations, indicating a solid fiscal year that topped the previously guided figures. The strong volume growth, coupled with a favorable reimbursement rate for the DecisionDx-SCC test, played a pivotal role in Souda’s positive assessment.
Looking ahead, 2024 is seen as a critical year for the company as coverage for the SCC test continues to be a focal point. The advanced diagnostic laboratory test (ADLT) status and the associated higher reimbursement rate have contributed to the company’s recent financial beat. Additionally, the consistent performance of the DecisionDx-Melanoma (DDx-M) test and its potential inclusion in clinical guidelines are factors that suggest a steady revenue stream moving forward. Souda’s outlook is further buoyed by the expectation of more clarity on reimbursement coverage in the first half of 2024, which could significantly impact Castle Biosciences’ financial trajectory.
In another report released yesterday, Scotiabank also assigned a Buy rating to the stock with a $33.00 price target.
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Castle Biosciences (CSTL) Company Description:
Castle Biosciences, Inc. is a commercial-stage dermatological cancer company, which engages in the provision of genomic information for physicians and patients. The company offers DecisionDx-Melanoma, a proprietary multi-gene expression profile (GEP) test that predicts the risk of metastasis and recurrence for patients diagnosed with invasive cutaneous melanoma. It also markets DecisionDx-UM, which is a proprietary GEP test that predicts the risk of metastasis for patients with uveal melanoma. The company was founded by Derek J. Maetzold in September 2007 and is headquartered in Friendswood, TX.
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