Castle Biosciences Inc. (NASDAQ: CSTL) surged 67% to $34.20 by early August after InvestingPro’s AI-driven Fair Value model identified the stock as undervalued, with the shares trading at $18.63 on May 12 when the intrinsic value was calculated at $28.20.
The three-month rally followed a 13.9% decline in May, during which the company’s market capitalization stood at $1.04 billion. InvestingPro’s model projected a 51% potential upside, with the initial fair-value target of $31.15 exceeded as the stock continued higher. By August 21, the shares closed at $34.20, marking a 67% total return since mid-May.
Castle Biosciences, a molecular diagnostics firm specializing in cancer detection, reported Q2 2026 revenue of $357.28 million, up from $339.92 million, while narrowing its EBITDA loss to $16.52 million from $18.35 million. The company also topped earnings estimates for the quarter.
Operational milestones included New York state approval for its atopic dermatitis test, 100,000 orders for its Barrett’s esophagus test, and superior performance of its melanoma test compared with existing risk-assessment tools. BTIG raised its price target on the stock following the revenue beat, citing strong execution.
InvestingPro’s Fair Value methodology combines discounted cash flow models, comparable company analyses, and analyst consensus targets, applying a margin of safety and forward-looking cash flow projections to derive intrinsic valuations.
