Head to Head Analysis: Castle Biosciences (NASDAQ:CSTL) vs. Alignment Healthcare (NASDAQ:ALHC)

Alignment Healthcare (NASDAQ:ALHC) and Castle Biosciences (NASDAQ:CSTL) are both small-cap healthcare companies, but which is the better business? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, analyst recommendations, valuation and dividends.

Profitability

This table compares Alignment Healthcare and Castle Biosciences’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alignment Healthcare	0.89%	20.02%	3.46%
Castle Biosciences	-5.43%	-4.15%	-3.45%

Volatility and Risk

Alignment Healthcare has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500. Comparatively, Castle Biosciences has a beta of 0.94, indicating that its stock price is 6% less volatile than the S&P 500.

Earnings & Valuation

This table compares Alignment Healthcare and Castle Biosciences”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alignment Healthcare	$3.95 billion	0.43	-$720,000.00	$0.19	43.32
Castle Biosciences	$344.23 million	2.94	-$24.16 million	($0.66)	-50.17

Alignment Healthcare has higher revenue and earnings than Castle Biosciences. Castle Biosciences is trading at a lower price-to-earnings ratio than Alignment Healthcare, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

86.2% of Alignment Healthcare shares are held by institutional investors. Comparatively, 92.6% of Castle Biosciences shares are held by institutional investors. 5.2% of Alignment Healthcare shares are held by company insiders. Comparatively, 6.1% of Castle Biosciences shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Alignment Healthcare and Castle Biosciences, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alignment Healthcare	0	5	7	0	2.58
Castle Biosciences	1	1	7	1	2.80

Alignment Healthcare currently has a consensus price target of $16.82, suggesting a potential upside of 104.35%. Castle Biosciences has a consensus price target of $42.00, suggesting a potential upside of 26.85%. Given Alignment Healthcare’s higher possible upside, equities analysts clearly believe Alignment Healthcare is more favorable than Castle Biosciences.

Summary

Alignment Healthcare beats Castle Biosciences on 8 of the 13 factors compared between the two stocks.

About Alignment Healthcare

Alignment Healthcare, Inc., a tech-enabled Medicare advantage company, operates consumer-centric health care platform for seniors in the United States. It provides customized health care designed to meet the needs of a diverse array of seniors through its Medicare advantage plans. The company was founded in 2013 and is based in Orange, California.

About Castle Biosciences

Castle Biosciences, Inc., a molecular diagnostics company, provides testing solutions for the diagnosis and treatment of dermatologic cancers, Barrett's esophagus, uveal melanoma, and mental health conditions. It offers DecisionDx-Melanoma, a risk stratification gene expression profile (GEP) test to identify the risk of metastasis for patients diagnosed with invasive cutaneous melanoma; DecisionDx-SCC, a proprietary risk stratification GEP test for patients with cutaneous squamous cell carcinoma; MyPath Melanoma, a test used for patients with difficult-to-diagnose melanocytic lesions; and TissueCypher, a spatial omics test to predict future development of high-grade dysplasia and/or esophageal cancer in patients with non-dysplastic, indefinite dysplasia, or low-grade dysplasia Barrett's esophagus. In addition, the company provides DecisionDx-UM test, a proprietary risk stratification GEP test that predicts the risk of metastasis for patients with uveal melanoma; and IDgenetix, a pharmacogenomic test that helps guide drug treatment for major depressive disorder, schizophrenia, bipolar disorder, anxiety disorders, social phobia, obsessive-compulsive personality disorder, post-traumatic stress disorder, and attention deficit hyperactivity disorder. It offers its products to skin cancer, gastroenterology, and mental health markets. The company was incorporated in 2007 and is headquartered in Friendswood, Texas.