Discounted Cash Flow Calculation for NasdaqGM:CSTL using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value using the 2 stage method.
We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.
Note: Free cash flow to equity valuations ignore the company's cash or debt.
NasdaqGM:CSTL DCF 1st Stage: Next 10 year cash flow forecast
Amount off the current price
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
Castle Biosciences's share price is below the future cash flow value, and at a moderate discount (> 20%).
Castle Biosciences's share price is below the future cash flow value, and at a substantial discount (> 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
is considered below, and whether this is a fair price.
Price based on past earnings
Castle Biosciences's earnings available for a low price, and how does
this compare to other companies in the same industry?
Castle Biosciences's earnings are expected to grow significantly at over 20% yearly.
Castle Biosciences's revenue is expected to grow significantly at over 20% yearly.
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
Castle Biosciences's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
has a total score of
0/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
A company's financial position is much like your own financial position,
it includes everything you own
The boxes below represent the relative size of what makes up
Castle Biosciences's finances.
The net worth of a company is the difference between its assets and liabilities.
Castle Biosciences is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Castle Biosciences's cash and other short term assets cover its long term commitments.
This treemap shows a more detailed breakdown of
Castle Biosciences's finances. If any of them are yellow this
indicates they may be out of proportion and red means they relate to one of the
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
Low level of unsold assets.
Debt is covered by short term assets, assets are 4.6x debt.
Nearly all companies have debt. Debt in itself isn’t
however if the debt is too high, or the company can’t afford to pay the interest
on its debts this may have impacts in the future.
The graphic below shows equity (available funds) and debt, we ideally want to
see the red area (debt) decreasing.
If there is any debt we look at the companies capability to repay it, and
whether the level has increased over the past 5 years.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
TENURE AS CEO
Mr. Derek J. Maetzold founded Castle Biosciences Incorporated and serves as its President, Chief Executive Officer and Director since 2008. Mr. Maetzold served as the Vice President of Marketing and Sales at Encysive Pharmaceuticals Inc., (formerly, Texas Biotechnology Corp.,) from June 3, 2003 to May 2008. He served in the Cardiovascular and Allergy Global Marketing groups for Schering-Plough Corporation (Schering Corporation) from 1999 to June 2003, including Senior Director of Business Development, Director of Marketing and Allergy Business Unit and Director of Marketing Planning, Ezetimibe and Clarinex. Prior to Schering-Plough Corporation, Mr. Maetzold served as the Director/Associate Director of Marketing, North America at Amylin Pharmaceuticals from 1996 to 1998. From 1998 to 1999, he served as an Account Supervisor for Integrated Table of Contents Communications Corporation. He began his career at Sandoz Pharmaceuticals Corporation (now Novartis), where he held various sales and marketing positions from 1985 to 1996. He serves as a Director of Castle Biosciences Incorporated. Mr. Maetzold is a senior biopharmaceutical leader with twenty-three years of increasing responsibility in commercial start-up leadership, business development transaction experience, US and global marketing and sales management experience, new product planning and product launch leadership and sales planning, development and execution experience. He has direct experience in business development - from candidate identification through deal negotiation and transaction completion of in-licensing product, technology and co-promotion opportunities. He has led and directed the strategic plan development, infrastructure plan and organizational focus and execution for both orphan / specialty and mass market products. Mr. Maetzold holds a BS degree in Biology from George Mason University, he also completed coursework at the University of Calgary Health Sciences Center and the MBA program at UC-Riverside.
Insufficient data for Derek to compare compensation growth.
Derek's remuneration is lower than average for companies of similar size in United States of America.
Management Team Tenure
Average tenure and age of the
management team in years:
The average tenure for the Castle Biosciences management team is over 5 years, this suggests they are a seasoned and experienced team.
Chief Financial Officer
Chief Medical Officer
Chief Operating Officer
Senior Vice President of Sales
Senior Vice President of Clinical Operations
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the Castle Biosciences board of directors is about average.
Board of Directors
Chairman of The Board
Member of Scientific Advisory Board
Member of Scientific Advisory Board
Who owns this company?
Recent Insider Trading
No 3 month open market individual insider trading information.
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.
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