Core Viewpoint - The article emphasizes the importance of confirming the sustainability of stock trends for profitable short-term investing, highlighting the use of a specific screening strategy to identify stocks with strong fundamentals and positive price momentum [1][2][3]. Group 1: Stock Screening Strategy - The "Recent Price Strength" screen is designed to identify stocks with sufficient fundamental strength to maintain their recent uptrend, focusing on those trading in the upper portion of their 52-week high-low range, indicating bullishness [3]. - Castle Biosciences, Inc. (CSTL) is highlighted as a suitable candidate that has shown a solid price increase of 63.6% over the past 12 weeks, reflecting investor confidence in its potential upside [4]. - CSTL has also experienced a price increase of 38% over the last four weeks, confirming that the upward trend is still intact [5]. Group 2: Fundamental Strength - CSTL currently holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, which are critical for near-term price movements [6]. - The Zacks Rank system has a strong track record, with Rank 1 stocks generating an average annual return of +25% since 1988, indicating the effectiveness of this ranking in identifying profitable investments [7]. - The Average Broker Recommendation for CSTL is also 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term price performance [7]. Group 3: Market Outlook - The price trend for CSTL is expected to remain positive, with the stock trading at 80.2% of its 52-week high-low range, suggesting it may be on the verge of a breakout [5][8]. - In addition to CSTL, there are several other stocks that meet the criteria of the "Recent Price Strength" screen, providing additional investment opportunities for trend-focused investors [8].

Core Insights - Castle Biosciences (NASDAQ:CSTL) experienced a rally of over 20% following a strong Q3 performance, indicating positive momentum in the stock [1] - The stock is currently in Phase 8 according to the Adhishthana Principles, having entered Phase 4 in August 2022, and is building a Cakra formation [3][5] - The stock is approaching the upper boundary of the Cakra structure, with two potential scenarios for its trajectory before transitioning into Phase 9 in January 2026 [5] Weekly Chart Analysis - The Cakra structure typically forms between Phases 4–8 and suggests bullish implications, with a breakout in Phase 9 leading to strong momentum [2] - As the stock moves through Phase 8, it has rebounded from the lower end of the Cakra and is preparing for a potential breakout [5] - Two scenarios are outlined: a rally to test the $35 level followed by a slight retracement before breaking out, or a premature breakout gaining strength in Phase 9 [5] Monthly Chart Analysis - On the monthly charts, Castle Biosciences is currently in Phase 2, which consists of the Sankhya period (consolidation or weakness) and the Buddhi period (powerful rallies) [6] - The company is in the Sankhya phase and is expected to transition into the Buddhi period in December 2025, coinciding with an anticipated increase in bullish momentum [7] Investor Outlook - For current shareholders, maintaining bullish positions is favorable, especially as momentum is expected to build once the stock surpasses the $35 mark [8] - Investors looking to enter new positions have an opportunity to accumulate shares through November, using the lower end of the Cakra as a stop-loss [8] - The overall setup indicates that Castle's base is firming up, suggesting a potential rally ahead [8]

Group 1 - The article does not provide any specific information or insights regarding a company or industry [1]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 reached $83 million, with a total revenue guidance for 2025 raised to $327-$335 million from the previous range of $310-$320 million [18][19] - Gross margin for Q3 2025 was 74.7%, down from 79.2% in Q3 2024, while adjusted gross margin was 76.8% compared to 81.9% in the same period last year [19] - Net loss for Q3 2025 was $0.5 million, compared to net income of $2.3 million in Q3 2024, with diluted loss per share at $0.02 versus diluted earnings per share of $0.08 in the prior year [21] Business Line Data and Key Metrics Changes - Total test report volume for Q3 2025 was 26,841, with core revenue drivers growing 36% year-over-year [12] - DecisionDx-Melanoma reports reached 10,459, marking a 12% year-over-year increase and surpassing 10,000 reports in a single quarter for the first time [12] - DecisionDx-SCC delivered 4,186 test reports in Q3 2025, maintaining high volume without proactive marketing [13] - TissueCypher achieved 10,609 test reports in Q3 2025, representing 75% year-over-year growth [16] Market Data and Key Metrics Changes - The target patient population for Advanced AD TX is estimated at approximately 13.2 million individuals aged 12 and older with moderate to severe atopic dermatitis, representing a $33 billion total addressable market opportunity in the US [9][10] - Approximately 80% of clinicians sampled indicated they would likely use Advanced AD TX, highlighting its potential value [10] Company Strategy and Development Direction - The launch of Advanced AD TX is aimed at implementing precision medicine in atopic dermatitis management, with plans for phased clinical availability throughout 2026 [11] - The company is focused on leveraging existing laboratory, logistics, and commercial infrastructure to efficiently introduce Advanced AD TX [10] - Continued emphasis on building education and awareness for TissueCypher to drive adoption and utilization [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the operating model and strategic initiatives, reinforcing the commitment to improving patient care [12][23] - The company expects to maintain positive net cash flow from operations for 2025, supported by strong top-line performance and disciplined expense management [22] Other Important Information - The company is pursuing multiple reimbursement pathways for Advanced AD TX, recognizing the need to build a new market [10] - New peer-reviewed evidence further validates the clinical utility of DecisionDx-SCC, enhancing its role in patient care [14][15] Q&A Session Summary Question: Addressable patient population for Advanced AD TX - Management estimated that around 10-20% of the 13.2 million patients with moderate to severe atopic dermatitis could be of Medicare age [24] Question: Reimbursement pathways for Advanced AD TX - Management indicated that they are exploring various reimbursement options but did not provide specific details at this time [25] Question: Timing and likelihood of SCC reconsideration requests - Management noted that the timing for reconsideration decisions is uncertain and depends on the pace of Medicare contractors [28] Question: Volume outlook for DecisionDx-Melanoma - Management reiterated expectations for high single-digit volume growth for DecisionDx-Melanoma for the full year 2025 [31] Question: Market penetration for TissueCypher - Management acknowledged that they are in the early growth phase for TissueCypher, with ongoing efforts to educate the market and increase adoption [35] Question: FDA approval impact on DecisionDx-Melanoma - Management does not anticipate a change in the Medicare rate due to FDA approval but sees potential long-term benefits from state biomarker laws [39][40]

Empowering people, informing care decisions November 2025 ©2025 Castle Biosciences 1 Disclaimers Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the "safe harbor" created by those sections. These forward-looking statements include, but are not limited to, statements concerning: our positioning for continued grow ...

Market Potential - The estimated total addressable market (TAM) for DecisionDx-Melanoma is approximately $540 million, with around 130,000 patients diagnosed annually in the U.S.[129] - The estimated TAM for DecisionDx-SCC is approximately $820 million, with 20% of SCC patients classified as high risk, totaling about 200,000 patients annually in the U.S.[130] - The TAM for MyPath Melanoma is estimated at $600 million, with approximately 300,000 patients presenting with diagnostically ambiguous lesions each year[131] - The TAM for AdvanceAD-Tx is approximately $33 billion, targeting around 13.2 million individuals aged 12 and older with moderate-to-severe atopic dermatitis in the U.S.[132] - TissueCypher has an estimated TAM of approximately $1 billion, aimed at predicting the progression of high-grade dysplasia and/or esophageal cancer[133] - DecisionDx-UM has an estimated TAM of approximately $10 million, being the standard of care in most ocular oncology practices in the U.S.[134] Reimbursement Rates - The reimbursement rate for DecisionDx-Melanoma is set at $7,193 per test for 2024 and 2025[140] - The reimbursement rate for DecisionDx-SCC is set at $8,500 per test from April 1, 2024, through December 31, 2025[142] - The reimbursement rate for TissueCypher is set at $4,950 per test for 2025, based on median private payor rates[146] Test Volume and Growth - Test report volume increased by 3.2% and 8.1% for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024[157] - Dermatologic test report volume rose by 9.0% and 7.6% for the three and nine months ended September 30, 2025, driven by growth in DecisionDx-Melanoma and DecisionDx-SCC tests[157] - TissueCypher test reports surged by 74.7% and 90.5% for the three and nine months ended September 30, 2025, compared to the prior year[157] - Approximately 74% of clinicians ordering DecisionDx-SCC also ordered DecisionDx-Melanoma during the nine months ended September 30, 2025[158] Financial Performance - Net revenues for the three months ended September 30, 2025 decreased by $2.7 million, or 3.2%, to $83.0 million compared to the same period in 2024[184] - Revenue from dermatologic tests decreased by $16.5 million, primarily due to lower average selling price driven by the loss of Medicare LCD coverage[185] - Revenue from non-dermatologic tests increased by $13.8 million, reflecting growth in test report volumes for the TissueCypher Barrett's Esophagus test[186] - For the nine months ended September 30, 2025, net revenues increased by $11.5 million, or 4.7%, to $257.2 million compared to the same period in 2024[196] - The gross margin percentage for the nine months ended September 30, 2025, was 66.8%, down from 79.3% in 2024, primarily due to lower average selling prices (ASP) for the DecisionDx-SCC test and increased amortization expenses[205] Expenses and Costs - Total operating expenses increased by $9.1 million, or 11.3%, to $89.8 million for the three months ended September 30, 2025[180] - Research and development expenses increased by $0.6 million, or 5.2%, primarily due to higher personnel costs[190] - Selling, general and administrative expenses increased by $5.4 million, or 10.7%, driven by higher personnel and travel expenses[191] - Selling, general and administrative (SG&A) expenses increased by $22.5 million, or 15.0%, for the nine months ended September 30, 2025, with sales and marketing expenses rising by 12.5% and general and administrative expenses increasing by 19.0%[207][208] - Cost of sales (exclusive of amortization of acquired intangible assets) increased by $8.7 million, or 19.7%, for the nine months ended September 30, 2025, primarily due to higher personnel and lab service costs[203] Cash and Investments - As of September 30, 2025, the company had cash and cash equivalents of $85.6 million and marketable investment securities of $202.0 million, compared to $119.7 million and $173.4 million, respectively, at the end of 2024[212] - The company anticipates that its existing cash, cash equivalents, and marketable investment securities will be sufficient to fund operations for at least the next 12 months[214] - Net cash provided by operating activities for the nine months ended September 30, 2025, was $37.4 million, a decrease of $3.1 million compared to $40.5 million for the same period in 2024[233][234] - Net cash used in investing activities increased to $69.2 million for the nine months ended September 30, 2025, primarily due to the acquisition of Capsulomics for $18.7 million[236][238] Corporate Developments - Castle Biosciences, Inc. plans to launch a sixth proprietary multi-analyte assay with algorithmic analysis (MAAA) test in November 2025[126] - The company is developing a new corporate headquarters in Friendswood, Texas, with a total expected cost of approximately $44.2 million, and has incurred $20.8 million in capital expenditures related to this project as of September 30, 2025[216] - The company expects significant increases in R&D expenses as it continues to invest in developing new products[170] - The company expects lease obligations to increase in the future to support anticipated growth in commercial products and pipeline tests[231] Debt and Obligations - As of September 30, 2025, total long-term debt was $10.0 million, with a net total of $10.0 million after accounting for unamortized discounts[219] - The 2024 Loan and Security Agreement includes a term loan of $10.0 million and a line of credit of $25.0 million, with the latter expiring on September 30, 2025[221][228] - The weighted-average effective interest rate for the outstanding debt under the 2024 Term Loan was 7.99% as of September 30, 2025[227] - Total undiscounted future minimum payment obligations under operating and finance leases were approximately $40.7 million as of September 30, 2025[230] - The company is subject to covenants under the 2024 LSA that restrict its ability to incur additional debt and make acquisitions[224]

Revenue Performance - Q3 2025 revenue was $83 million, a decrease from $85.8 million in Q3 2024[5] - Castle Biosciences reported net revenues of $83.043 million for the three months ended September 30, 2025, a decrease of 3.2% compared to $85.782 million in the same period of 2024[31] - Adjusted revenues for the three months ended September 30, 2025, were $80.545 million, down from $86.334 million in 2024, representing a decrease of about 6.5%[40] - Full-year 2025 revenue guidance raised to $327-335 million from $310-320 million[9] - Castle Biosciences expects total revenue guidance for 2025 to be between $327 million and $335 million[27] Profitability and Loss - Net loss for Q3 2025 was $0.5 million, compared to net income of $2.3 million in Q3 2024[7] - The company reported a net loss of $501,000 for the three months ended September 30, 2025, compared to a net income of $2.269 million in the same period of 2024[33] - Net loss for the nine months ended September 30, 2025, was $21.826 million, a significant decline from a net income of $8.655 million in the same period of 2024[37] - The company incurred an operating loss of $6.804 million for the three months ended September 30, 2025, compared to an operating income of $5.079 million in the same period of 2024[31] - The company’s comprehensive loss for the three months ended September 30, 2025, was $300,000, compared to comprehensive income of $2.914 million in the same period of 2024[33] Operating Expenses - Total operating expenses for the three months ended September 30, 2025, were $89.847 million, an increase of 11.4% from $80.703 million in the same period of 2024[31] - Stock-based compensation expense for the three months ended September 30, 2025, was $12.1 million, down from $13.027 million in the same period of 2024[32] Test Reports and Product Launches - Total test reports for core revenue drivers increased by 36% over Q3 2024, with DecisionDx-Melanoma and TissueCypher each surpassing 10,000 test reports for the first time in a single quarter[4] - The company launched AdvanceAD-Tx™, a test for guiding treatment decisions in patients with moderate-to-severe atopic dermatitis[1] - Total test reports delivered in the nine months ended September 30, 2025, were 77,817, compared to 72,000 in the same period of 2024[7] Cash and Assets - Cash, cash equivalents, and marketable investment securities totaled $287.5 million as of September 30, 2025[8] - Total assets increased to $562.786 million as of September 30, 2025, compared to $531.235 million on December 31, 2024, reflecting a growth of approximately 5.0%[35] - Cash and cash equivalents decreased to $85.556 million at the end of the period from $119.709 million at the beginning, a decline of approximately 28.3%[37] Liabilities - Total current liabilities increased to $55.308 million as of September 30, 2025, compared to $49.392 million on December 31, 2024, reflecting an increase of about 12.3%[35] - The company’s total liabilities rose to $95.740 million as of September 30, 2025, compared to $75.400 million at the end of 2024, marking an increase of approximately 27.0%[35] EBITDA - Adjusted EBITDA for Q3 2025 was $9.2 million, down from $21.6 million in Q3 2024[7] - Adjusted EBITDA for the nine months ended September 30, 2025, was not explicitly stated but is calculated by excluding certain expenses from net income, which was a loss of $21.826 million[31][32] - Adjusted EBITDA for the nine months ended September 30, 2025, was $32.546 million, down from $53.730 million in 2024, a decrease of approximately 39.4%[44] Gross Margin - Gross margin for Q3 2025 was 75%, down from 79% in Q3 2024[7] - The company reported a gross margin (GAAP) of 74.7% for the three months ended September 30, 2025, down from 79.2% in 2024[40] - Adjusted gross margin percentage for the three months ended September 30, 2025, was 76.8%, compared to 81.9% in 2024, indicating a decline of 5.1 percentage points[40]

Financial Performance - Company reported Q3 2025 revenue of $83 million, a decrease from $85.8 million in Q3 2024 [5][9] - Non-dermatologic revenue increased by 67% compared to Q3 2024 [1] - Total test reports for core revenue drivers (DecisionDx-Melanoma, TissueCypher) increased by 36% over Q3 2024 [1] - Company raised full-year 2025 revenue guidance to $327-335 million from $310-320 million [1][8] Operational Highlights - Total test reports delivered in Q3 2025 were 26,841, compared to 26,010 in Q3 2024 [5] - DecisionDx-Melanoma test reports delivered were 10,459, up from 9,367 in Q3 2024 [5] - TissueCypher Barrett's Esophagus test reports delivered were 10,609, compared to 6,073 in Q3 2024 [5] - DecisionDx-SCC test reports delivered were 4,186, slightly down from 4,195 in Q3 2024 [5] New Product Launch - Company announced the launch of AdvanceAD-Tx™, a test designed to guide systemic treatment decision-making in patients with moderate-to-severe atopic dermatitis [1][12] Gross Margin and Adjusted Metrics - Gross margin for Q3 2025 was 75%, down from 79% in Q3 2024 [5] - Adjusted gross margin was 77%, compared to 82% in the same period of 2024 [5] - Adjusted EBITDA for Q3 2025 was $9.2 million, down from $21.6 million in Q3 2024 [9] Cash and Investments - As of September 30, 2025, the company's cash, cash equivalents, and marketable investment securities totaled $287.5 million [7]

Core Insights - Castle Biosciences has launched AdvanceAD-Tx™, a gene expression profile test aimed at guiding treatment decisions for patients aged 12 and older with moderate-to-severe atopic dermatitis (AD) [1][10] - The test identifies patients with a Janus kinase inhibitor (JAKi) responder profile, indicating a higher likelihood of achieving significant improvement in their condition when treated with JAK inhibitors compared to Th2-targeted therapies [2][11] Company Overview - Castle Biosciences is focused on developing innovative diagnostic tests that enhance patient care, particularly in dermatologic and gastroenterological diseases [7] - The company aims to leverage its existing technology to address unmet needs in the field of atopic dermatitis, with a total addressable market estimated at $33 billion [3][4] Product Details - AdvanceAD-Tx is a non-invasive test that evaluates 487 genes to classify patients into JAKi responder or Th2 molecular profiles, providing insights to personalize treatment [10][11] - In clinical validation, 30.4% of tested samples showed a JAKi responder profile, with those patients achieving a 90% improvement in disease severity (EASI-90) at a significantly higher rate compared to those on Th2-targeted therapy (45.5% vs 8.3%) [4][11] Clinical Integration and Launch Strategy - The test is designed for easy integration into existing laboratory workflows, facilitating adoption by dermatologists familiar with Castle's other tests [5] - AdvanceAD-Tx will be launched in a phased manner starting November 2025, with broader availability expected throughout 2026 [5] Market Potential - The U.S. market for atopic dermatitis treatments is substantial, with approximately 13.2 million patients aged 12 and older suffering from moderate-to-severe AD [4] - The introduction of AdvanceAD-Tx is anticipated to act as a growth catalyst for Castle Biosciences alongside its established tests in dermatology and gastrointestinal areas [3]

Core Insights - Castle Biosciences is expected to report Q3 2025 results on November 3, 2025, with anticipated earnings of ($0.35) per share and revenue of $71.062 million [1][2] - The company previously reported Q2 2025 earnings of $0.15 per share, exceeding estimates by $0.66, with revenue of $86.18 million, surpassing expectations of $71.53 million [3] - Analysts project a $0 EPS for the current fiscal year and a $-2 EPS for the next fiscal year [3] Financial Performance - Castle Biosciences has a market capitalization of $739.76 million, with a price-to-earnings ratio of -72.86 and a beta of 1.13 [4] - The stock has fluctuated between a fifty-two week low of $14.59 and a high of $35.84, with a current stock price of $25.50 [4] - The company maintains a debt-to-equity ratio of 0.02, a quick ratio of 6.69, and a current ratio of 6.85 [4] Insider Activity - Insider Derek J. Maetzold sold 1,339 shares at an average price of $22.44, totaling $30,047.16, resulting in a 2.08% decrease in his position [5] - Following the sale, Maetzold holds 62,988 shares valued at approximately $1.41 million [5] Institutional Holdings - Institutional investors own 92.60% of Castle Biosciences, with notable increases in holdings from several firms, including a 10,592% increase from Jones Financial Companies [6] - Other significant increases include a 256.9% boost from Tower Research Capital and a 15,811.5% increase from Amundi [6] Analyst Ratings - Weiss Ratings issued a "sell (d-)" rating, while Wall Street Zen upgraded the stock from "sell" to "hold" [7] - Canaccord Genuity maintains a "buy" rating with a price target of $37.00, and Zacks Research upgraded the stock to "strong-buy" [7][8] - The consensus rating is "Moderate Buy" with an average target price of $36.57 [8] Company Overview - Castle Biosciences specializes in molecular diagnostics, providing testing solutions for dermatologic cancers, Barrett's esophagus, uveal melanoma, and mental health conditions [9] - Key products include DecisionDx-Melanoma, DecisionDx-SCC, MyPath Melanoma, and TissueCypher, which assist in risk stratification and diagnosis [9]