Castle Biosciences, Inc.

AI-generated fair value estimate for this company.

Method: 10-year unlevered FCF DCF: base FCF $28.3M (FY2025 operating cash flow $64.3M less $36.0M capex); 12% annual FCF growth years 1-5 (above the ~8.4% 2026 consensus revenue growth, reflecting expected gross-margin recovery as TissueCypher volume, +86.4% YoY, scales and dilutes fixed lab costs); 6% years 6-10; 10% discount rate; 3% terminal growth; net cash $289.4M (cash & investments $299.5M less $10.1M debt); 30.55M shares outstanding.

Reasoning: Castle Biosciences generates positive free cash flow despite a GAAP operating loss driven by non-cash items, and its fast-growing TissueCypher test is offsetting recent gross-margin compression, so a free-cash-flow DCF with margin-recovery-driven growth is appropriate; the discount rate reflects normal diagnostics-sector reimbursement risk.