CSTL
Castle Biosciences, Inc.
$23.12
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 22.4% above fair value
You pay
$23.12
Bear
$16.68
Fair
$18.89
Bull
$21.26
Bear
$16.68
-27.9%
8% stage 1 growth, 11% discount
Fair
$18.89
-18.3%
13% stage 1 growth, 11% discount
Bull
$21.26
-8.1%
17% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (13% base case)
Terminal Value % of EV
42%
Implied Market Multiple
82.5x
Market is pricing in (growth)
27.9%
vs 13.3% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $40.50 from 11 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $18.89 per share.
Warnings
Wall Street's average price target is $40.50 (from 11 analysts). Our estimate is 67% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions