Analyzing Castle Biosciences (NASDAQ:CSTL) and Guardant Health (NASDAQ:GH)

Castle Biosciences (NASDAQ:CSTL) and Guardant Health (NASDAQ:GH) are both medical companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, institutional ownership, valuation and profitability.

Profitability

This table compares Castle Biosciences and Guardant Health’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Castle Biosciences N/A N/A N/A
Guardant Health -33.84% -10.02% -8.46%

Institutional and Insider Ownership

29.7% of Castle Biosciences shares are owned by institutional investors. Comparatively, 81.6% of Guardant Health shares are owned by institutional investors. 13.0% of Guardant Health shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Castle Biosciences and Guardant Health’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Castle Biosciences $51.87 million 8.77 $5.28 million ($0.81) -32.68
Guardant Health $214.38 million 28.99 -$75.65 million ($0.84) -78.38

Castle Biosciences has higher earnings, but lower revenue than Guardant Health. Guardant Health is trading at a lower price-to-earnings ratio than Castle Biosciences, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Castle Biosciences and Guardant Health, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Castle Biosciences 0 0 4 0 3.00
Guardant Health 0 0 7 0 3.00

Castle Biosciences presently has a consensus price target of $40.00, indicating a potential upside of 51.11%. Guardant Health has a consensus price target of $109.50, indicating a potential upside of 66.31%. Given Guardant Health’s higher possible upside, analysts clearly believe Guardant Health is more favorable than Castle Biosciences.

Castle Biosciences Company Profile

Castle Biosciences, Inc., a commercial-stage dermatological cancer, develops and commercializes diagnostic and prognostic tests for cancers. Its lead product is DecisionDx-Melanoma, a multi-gene expression profile (GEP) test to identify stage I and II patients at high risk of metastasis based on biological information from 31 genes within their tumor tissue. The company also offers DecisionDx-UM test, a proprietary GEP test that predicts the risk of metastasis for patients with uveal melanoma, a rare eye cancer; and two late-stage proprietary products in development, which address cutaneous squamous cell carcinoma and suspicious pigmented lesions, which are indications with high clinical need in dermatological cancer. It offers test services through physicians, physician assistants, and nurse practitioners. The company was founded in 2007 and is headquartered in Friendswood, Texas.

Guardant Health Company Profile

Guardant Health, Inc., a precision oncology company, provides blood tests, data sets, and analytics in the United States and internationally. The company offers liquid biopsy tests for advanced stage cancer, such as Guardant360, a molecular diagnostic test that measures various cancer-related genes; and GuardantOMNI, a broader gene panel, including genes associated with homologous recombination repair deficiency and biomarkers for immuno-oncology applications. It also provides LUNAR-1 for minimal residual disease and recurrence detection in cancer survivors. In addition, the company is developing LUNAR-2 for early detection of cancer in higher risk individuals. Further, it offers development services, including companion diagnostic development and regulatory approval, clinical trial referral, and liquid biopsy testing development and support services to biopharmaceutical companies and medical institutions. Guardant Health, Inc. was incorporated in 2011 and is headquartered in Redwood City, California.

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