Can Castle Biosciences Stock Rebound After The Recent 24% Drop?

The stock price of Castle Biosciences (NASDAQ: CSTL), a skin cancer diagnostic company, has seen a large 24% drop over the last ten trading days, while it is down 14% over the last five trading days. We believe the stock, after the recent drop, may trend higher in the near term. The recent drop can largely be attributed to the company’s lower than expected Q4 results, with a loss per share of $0.23 (vs. consensus of $0.11 profit per share). The company’s total revenue of $17.3 million, though, was slightly above the $15.7 million consensus estimates. The revenue growth was partly driven by higher gene expression profile test reports during the quarter. However, gross margins declined to 85% (vs. 89% in prior year quarter) due to growth in staff ahead of new launches. Furthermore, operating costs also surged to 102% from 74% in the prior year quarter, due to increased R&D investments as well as growth in SG&A expenses.

Looking at the recent decline, the 24% drop for CSTL stock over the last ten days compares with a 0.5% drop seen in the broader S&P 500 index. Now, is CSTL stock poised to drop further? It doesn’t look that way. Based on our machine learning analysis of trends in the stock price over the last few years, we believe that there is a strong 83% chance of a rise in CSTL stock over the next month (twenty-one trading days). See our analysis on Castle Biosciences Stock Chances of Rise for more details. Curious about the possibility of rising over the next quarter? Check out the CSTL Stock AI Dashboard: Chances Of Rise And Fall for a variety of scenarios on how CSTL stock could move.

Five Days: CSTL -14%, vs. S&P500 2.3%; Underperformed market

(4% likelihood event)

• Castle Biosciences stock declined 14% over a five-day trading period ending 3/10/2021, compared to a broader market (S&P500) rise of 2.3%
• A change of -14% or more over five trading days is a 4% likelihood event, which has occurred 46 times out of 1256 in the last five years

Ten Days: CSTL -24%, vs. S&P500 -0.5%; Underperformed market

(extremely rare event)

• Castle Biosciences stock declined 24% over the last 10 trading days (two weeks), compared to broader market (S&P500) decline of 0.5%
• A change of -24% or more over 10 trading days is a <1% likelihood event, which has occurred 4 times out of 1240 in the last five years

Twenty-One Days: CSTL -32%, vs. S&P500 -0.2%; Underperformed market

(19% likelihood event)

• Castle Biosciences stock declined 32% the last 21 trading days (one month), compared to broader market (S&P500) decline of 0.2%
• A change of -32% or more over 21 trading days is a 19% likelihood event, which has occurred 236 times out of 1198 in the last five years

While CSTL stock may see a rebound, 2020 has created many pricing discontinuities which can offer attractive trading opportunities. For example, you’ll be surprised how counter-intuitive the stock valuation is for Abbott vs. Corcept.

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