Veracyte's 15min chart triggers Bollinger Bands narrowing and KDJ death cross.

According to the 15-minute chart for Veracyte, there has been a narrowing of Bollinger Bands, which indicates a decrease in the magnitude of stock price fluctuations. Furthermore, the KDJ indicator has triggered a "Death Cross" at 08/19/2025 15:45, suggesting a shift in momentum towards the downside and potentially further decreases in stock price.

Title: Castle Biosciences: A Closer Look at the Undervalued Stock

Castle Biosciences, Inc. (CSTL) has recently caught the attention of investors due to its strong financial performance and innovative diagnostic tests. Despite a recent decline in stock price, the company's fundamentals suggest it may be undervalued.

# Strong Financial Performance

Castle Biosciences develops gene expression profile tests for cancer diagnosis and treatment. Their flagship product, DecisionDx-Melanoma, predicts the risk of melanoma spreading or recurring by analyzing 31 genes in a tumor sample. This personalized risk score helps doctors make informed treatment decisions, potentially avoiding unnecessary surgeries and improving patient outcomes.

The company has shown consistent revenue growth, with revenues increasing from $63 million in 2020 to $220 million in 2023, representing a compound annual growth rate (CAGR) of approximately 50%. Gross margins have remained high at around 80%, indicating a lucrative business model at scale. Operating expenses have grown, but they are relatively stable and support the company's growth.

# Recent Headwinds

Despite its strong performance, Castle Biosciences has faced some challenges. In the first quarter of 2025, the company reported a net loss of $25.8 million, primarily due to the discontinuation of the IDgenetix test line. This one-time accounting hit affected gross margins and earnings but was not a recurring operating loss. Additionally, in the second quarter of 2025, Medicare pulled coverage for the DecisionDx-SCC test, which could impact sales. However, management is actively working to get this decision overturned.

# Valuation

Despite these challenges, Castle Biosciences appears to be undervalued. At the time of writing, the stock trades around 1x annual revenue, and analysts have an average price target of $35–$38, which is nearly 90% higher than the recent price. The company's enterprise value is roughly equal to the sales it will do this year, and it has a strong balance sheet with $275 million in cash and minimal debt.

# Conclusion

Castle Biosciences offers a compelling investment opportunity. With its innovative diagnostic tests, strong financial performance, and undervalued stock price, it may be a worthwhile addition to a diversified portfolio. However, investors should carefully consider the recent headwinds and the company's ability to navigate them successfully.

# References

[1] https://www.reddit.com/r/ValueInvesting/comments/1mraspy/i_feel_like_more_people_should_talk_about_this/