The Castle Group (CAGU) Stock Analysis & Winston Score

The Castle Group, Inc. is a small hospitality company based in Hawaii that manages vacation rental properties and resort condominiums on behalf of property owners. It handles day-to-day operations like bookings, housekeeping, and guest services for condo-hotel units and vacation rentals, primarily serving tourists visiting the Hawaiian Islands. The company operates in the travel lodging industry, acting as a third-party property manager rather than owning the real estate itself.

The company earns money by taking a percentage of rental revenue generated from the properties it manages, along with fees for related services. Its operations are heavily concentrated in Hawaii, making it a small, regionally focused business with limited geographic diversification. Thin operating margins of under 2% leave little room for error, and the business is highly exposed to swings in tourism demand — any slowdown in visitor travel to Hawaii due to economic downturns, natural disasters, or airline capacity changes could quickly pressure revenue and profitability.

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+7.8% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

+852.4% YoY

YoY Growth Rate

EPS growth accelerating

Insider Activity

1.8%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$4M cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Growth context

The Castle Group is growing revenue at 8% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

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Quality

Gross Margin

25.6%

Modest — 25.6% gross margin

Operating Margin

6.1%

Modest — 6.1% operating margin

ROCE

5.8%

Weak — 5.8% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

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Growth

Sales YoY

+1.3%

Nearly flat sales (1.3% YoY)

EPS YoY

+0.8%

Flat earnings

Single-digit earnings growth — steady but not exciting.

EPS Consistency

4/8 quarters

Earnings inconsistent quarter-to-quarter

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Cash Flow

Cash Conversion

864%

Turns 864% of profit into real cash

FCF Margin

8.9%

Modest free cash flow (8.9%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

Debt / Equity

1.71

Elevated debt (1.71)

Interest Cover

2.58x

Tight — interest eats into profit (2.6x)

Interest coverage between 1 and 3. Profits cover interest, but with little room to spare.

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Valuation

P/E Ratio (TTM)

0.4x

no trend

Attractive valuation — P/E 0.4

P/E under 10. The price tag is small relative to last year's profit.

P/E vs Forward

N/A

not available

Data not available

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Dividends

Not applicable for this business.

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