Why Butterfly Network Stock Flew Higher Today

Evan Niu, CFA
(TMFNewCow)

Jun 21, 2021

Jennings is forecasting strong adoption of Butterfly iQ and believes that recurring software-as-a-service (SaaS) revenue can grow at a compound annual growth rate (CAGR) of 60%. Jennings is the first major Wall Street analyst to cover Butterfly Network.


Shares of Butterfly Network (NYSE:BFLY) have flown higher today, up by 10% as of 12:40 p.m. EDT, after getting a bullish initiation from Wall Street. Cowen started coverage of the healthcare company with an outperform rating (equivalent to a buy).

So what
c Butterfly Network sells its Butterfly iQ+, a handheld ultrasound device, that works with a mobile app. Healthcare providers pay a subscription fee to use the software platform.

Butterfly iQ+ next to a smartphone with an app showing an ultrasound
BUTTERFLY IQ+ AND THE ACCOMPANYING APP. IMAGE SOURCE: BUTTERFLY NETWORK.

"We believe [Butterfly Network] can transform healthcare delivery by successfully equipping healthcare providers and chronically ill patients with personal ultrasound devices," Jennings wrote in a research note to investors. "Democratizing access to advanced medical imaging should build clinical, societal, and shareholder value."

Now what
Jennings is forecasting strong adoption of Butterfly iQ and believes that recurring software-as-a-service (SaaS) revenue can grow at a compound annual growth rate (CAGR) of 60%. Jennings is the first major Wall Street analyst to cover Butterfly Network.

The company reported fiscal first-quarter results last month, which disappointed investors. Butterfly Network's guidance called for 2021 revenue in the range of $76 million to $80 million, which should result in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of negative $140 million to negative $160 million. Net loss for the year is expected to be $135 million to $155 million.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

About Butterfly Network, Inc. (Location Guilford CT)

Founded by Dr. Jonathan Rothberg in 2011 and recently listed on the NYSE through a merger with Longview Acquisition Corp, Butterfly created the world's first handheld, single probe whole-body ultrasound system, Butterfly iQ. Butterfly’s mission is to enable universal access to superior medical imaging, making high-quality ultrasound affordable, easy-to-use, globally accessible, and intelligently connected, including for the 4.7 billion people around the world lacking access to ultrasound. Through its proprietary Ultrasound-on-Chip™ technology, Butterfly is paving the way for earlier detection and remote management of health conditions around the world. The Butterfly iQ can be purchased online today by healthcare practitioners in the United States, Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, the Netherlands, New Zealand, Norway, Poland, Portugal, Spain, Sweden, Switzerland, and the United Kingdom.