BTIG raised its price target for Castle Biosciences (NASDAQ:CSTL) to $41 from $32 after the company reported fourth quarter results and initial revenue guidance for 2020. The stock closed at $29.36 on March 10.
Castle is an early commercial-stage diagnostics company specializing in dermatological cancers. It has two products on the market, with Medicare coverage, and two additional products set for commercial launch in the second half of 2020.
Initial 2020 revenue guidance of $61-million to 64-million represents an 18% to 23% year-over-year increase, exceeding prior consensus of $53-million.
Analyst Sung Ji Nam writes that the key growth driver once again in 2020 is the recent sales force expansion in December 2019, driving DecisionDx-Melanoma test volume growth. Castle more than doubled its commercial and medical affairs personnel in 2019.
Ms. Nam said the company’s total addressable market is expected to more than triple in size to about $2-billion with the launch of DecisionDx-SCC (squamous cell carcinoma) and a test for suspicious pigmented lesions in the second half of 2020.
