LifeMD (NASDAQ:LFMD – Get Free Report) and Castle Biosciences (NASDAQ:CSTL – Get Free Report) are both small-cap healthcare companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, profitability, risk, earnings, analyst recommendations, dividends and valuation.
Institutional and Insider Ownership
35.5% of LifeMD shares are held by institutional investors. Comparatively, 92.6% of Castle Biosciences shares are held by institutional investors. 17.2% of LifeMD shares are held by insiders. Comparatively, 6.1% of Castle Biosciences shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Earnings and Valuation
This table compares LifeMD and Castle Biosciences”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| LifeMD | $194.05 million | 0.41 | $14.35 million | ($0.05) | -33.10 |
| Castle Biosciences | $344.23 million | 3.09 | -$24.16 million | ($0.77) | -44.81 |
LifeMD has higher earnings, but lower revenue than Castle Biosciences. Castle Biosciences is trading at a lower price-to-earnings ratio than LifeMD, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of current ratings and recommmendations for LifeMD and Castle Biosciences, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| LifeMD | 1 | 1 | 8 | 0 | 2.70 |
| Castle Biosciences | 1 | 1 | 8 | 1 | 2.82 |
LifeMD currently has a consensus target price of $7.57, suggesting a potential upside of 357.49%. Castle Biosciences has a consensus target price of $46.50, suggesting a potential upside of 34.78%. Given LifeMD’s higher possible upside, research analysts plainly believe LifeMD is more favorable than Castle Biosciences.
Volatility & Risk
LifeMD has a beta of 2.19, suggesting that its stock price is 119% more volatile than the S&P 500. Comparatively, Castle Biosciences has a beta of 1, suggesting that its stock price has a similar volatility profile to the S&P 500.
Profitability
This table compares LifeMD and Castle Biosciences’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| LifeMD | 0.10% | -168.23% | -31.27% |
| Castle Biosciences | -6.10% | -4.89% | -4.06% |
Summary
Castle Biosciences beats LifeMD on 7 of the 13 factors compared between the two stocks.
About LifeMD
LifeMD, Inc. is a virtual healthcare company that connects patients with medical providers through its telehealth platform. Its services include virtual primary care and specialty care, with offerings in areas such as men’s health and weight management. The company operates the LifeMD and Rex MD brands and supports care through online consultations, treatment plans and, when prescribed, medication. Service availability and treatment options may vary by state and individual patient needs. LifeMD serves patients in the United States.
About Castle Biosciences
Castle Biosciences, Inc. is a molecular diagnostics company that develops and commercializes tests intended to help physicians make personalized treatment and care decisions. Its tests analyze biological features of tissue to provide information about disease behavior and patient risk. The company’s portfolio includes DecisionDx tests for conditions such as cutaneous melanoma, cutaneous squamous cell carcinoma and uveal melanoma. It also offers TissueCypher, a test designed to assess progression risk in patients with Barrett’s esophagus.
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