Head-To-Head Comparison: HealthEquity (NASDAQ:HQY) versus Castle Biosciences (NASDAQ:CSTL)

HealthEquity (NASDAQ:HQY) and Castle Biosciences (NASDAQ:CSTL) are both healthcare companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, profitability, institutional ownership, risk, analyst recommendations, earnings and valuation.

Analyst Recommendations

This is a breakdown of current ratings for HealthEquity and Castle Biosciences, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HealthEquity	1	1	10	1	2.85
Castle Biosciences	1	1	7	1	2.80

HealthEquity presently has a consensus target price of $112.20, indicating a potential upside of 21.92%. Castle Biosciences has a consensus target price of $42.00, indicating a potential upside of 28.21%. Given Castle Biosciences’ higher possible upside, analysts clearly believe Castle Biosciences is more favorable than HealthEquity.

Volatility & Risk

HealthEquity has a beta of 0.24, indicating that its stock price is 76% less 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.

Institutional and Insider Ownership

99.5% of HealthEquity shares are held by institutional investors. Comparatively, 92.6% of Castle Biosciences shares are held by institutional investors. 1.6% of HealthEquity shares are held by insiders. Comparatively, 6.1% of Castle Biosciences shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
HealthEquity	17.36%	15.33%	9.51%
Castle Biosciences	-5.43%	-4.15%	-3.45%

Earnings and Valuation

This table compares HealthEquity and Castle Biosciences”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HealthEquity	$1.31 billion	5.80	$215.20 million	$2.77	33.22
Castle Biosciences	$344.23 million	2.91	-$24.16 million	($0.66)	-49.64

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

Summary

HealthEquity beats Castle Biosciences on 11 of the 14 factors compared between the two stocks.

About HealthEquity

HealthEquity, Inc. provides technology-enabled services platforms to consumers and employers in the United States. The company offers cloud-based platforms for individuals to make health saving and spending decisions, pay healthcare bills, receive personalized benefit information, earn wellness incentives, grow their savings, and make investment choices; and health savings accounts. It also provides investment platform; and online-only automated investment advisory services through Advisor, a Web-based tool. In addition, the company offers flexible spending accounts; health reimbursement arrangements; and Consolidated Omnibus Budget Reconciliation Act continuation services, as well as administers pre-tax commuter benefit programs. It serves clients through a direct sales force; benefits brokers and advisors; and a network of health plans, benefits administrators, benefits brokers and consultants, and retirement plan record-keepers. HealthEquity, Inc. was incorporated in 2002 and is based in Draper, Utah.

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.