Butterfly Network, Inc.
BFLY
$7.01
-3.97%
Butterfly Network, Inc. is a digital health company that has revolutionized medical imaging with its handheld, whole-body ultrasound device powered by proprietary Ultrasound-on-Chip technology. As a disruptive innovator in the medical devices industry, it offers a portable, affordable alternative to traditional cart-based ultrasound systems, targeting point-of-care settings globally. The current investor narrative centers on the company's accelerating revenue growth trajectory, driven by expanding adoption of its Butterfly iQ+ probe and cloud-connected software platform, while the path to profitability remains a key debate as the company continues to invest in R&D and commercial expansion.…
BFLY
Butterfly Network, Inc.
$7.01
BFLY 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Butterfly Network, Inc.'s 12-month outlook, with a consensus price target around $7.06 and implied upside of +0.8% versus the current price.
Average Target
$7.06
0 analysts
Implied Upside
+0.8%
vs. current price
Analyst Count
—
covering this stock
Price Range
$5 - $11
Analyst target range
Butterfly Network is covered by 4 analysts, with a consensus leaning bullish. The average price target is $7.06, implying a -3.3% downside from the current price of $7.30. The distribution shows no explicit 'Buy' or 'Sell' ratings in the data, but recent actions from Freedom Broker, TD Cowen, and Lake Street have all been 'Buy' ratings, indicating positive sentiment. The average target suggests limited upside in the near term, but the recent upgrades point to growing confidence. The target range spans from a low of $5.25 to a high of $11.00. The high target of $11.00 implies 50.7% upside and likely assumes continued revenue acceleration and a path to profitability, while the low target of $5.25 (-28.1% downside) may reflect concerns about competitive pressure or slower adoption. The spread of $5.75 between low and high indicates moderate uncertainty. Recent ratings from multiple firms in early 2026 show a pattern of 'Buy' reiterations, reinforcing positive sentiment. The limited analyst coverage (4 analysts) is typical for a small-cap growth stock, which can lead to higher volatility and less efficient price discovery.
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Bulls vs Bears: BFLY Investment Factors
Butterfly Network presents a compelling growth story with accelerating revenue, surging gross margins, and a strong balance sheet, but remains unprofitable with negative operating margins and free cash flow. The bull case rests on continued revenue acceleration and margin expansion driving a path to profitability, while the bear case highlights the lack of near-term profits and a valuation that already prices in high growth. The single most important tension is whether revenue growth can sustain above 20% and margins continue to improve, as any deceleration would compress the premium PS multiple. Currently, the bull case has stronger evidence given the accelerating growth and improving margins, but the stock's high beta and negative earnings demand caution.
Bullish
- Revenue Growth Accelerating to 25%: Q1 2026 revenue grew 24.99% YoY to $26.53M, accelerating from 9.3% growth in Q4 2025. This demonstrates strong commercial momentum for the Butterfly iQ+ and software platform.
- Gross Margin Surged to 68.9%: Gross margin improved dramatically from -17.5% in Q3 2025 to 68.9% in Q1 2026, reflecting better product mix and cost controls. This indicates operating leverage as revenue scales.
- Strong Balance Sheet with $142M Cash: The company has $142M in cash and minimal debt (debt-to-equity of 0.10), providing a multi-year runway. Current ratio of 3.83 ensures ample liquidity for operations.
- Massive Relative Strength vs Market: Stock up 314.8% over 1 year vs S&P 500's 20.9%, with 1-month relative strength of 29.1%. This signals strong investor conviction in the turnaround story.
Bearish
- Still Unprofitable with Negative Margins: Operating margin remains deeply negative at -50.8% in Q1 2026, and net loss was $12.68M. The company has not demonstrated a clear path to profitability.
- Average Analyst Target Below Current Price: The average analyst target of $7.06 implies -3.3% downside from $7.30, suggesting the stock may be fully valued near-term. Limited upside consensus.
- High Beta of 2.05 Amplifies Downside Risk: With beta of 2.05, the stock is 105% more volatile than the market. In a market downturn, BFLY could fall significantly more than the S&P 500.
- Negative Free Cash Flow of -$14.8M: Free cash flow was negative $14.8M in Q1 2026, and TTM FCF is -$18.9M. While cash reserves are adequate, continued cash burn without profitability is a concern.
BFLY Technical Analysis
Butterfly Network's stock is in a powerful long-term uptrend, with a 1-year price change of +314.8%, massively outperforming the S&P 500's +20.9% gain. The current price of $7.30 sits at 70.5% of its 52-week range ($1.32-$9.69), indicating the stock is in the upper half of its range but not yet overextended near the highs. This positioning suggests strong momentum but also potential resistance as it approaches the $9.69 peak. Short-term momentum is accelerating sharply: the 1-month price change is +29.7% and the 3-month change is +38.0%, both far exceeding the S&P 500's respective gains of 0.6% and 6.3%. This acceleration from the longer-term trend confirms robust buying pressure, with no signs of divergence. The stock's beta of 2.05 implies it is roughly 105% more volatile than the market, amplifying both upside and downside moves. Key support lies at the 52-week low of $1.32, while resistance is at the 52-week high of $9.69. A breakout above $9.69 would signal a continuation of the uptrend, while a breakdown below recent support near $7.00 could indicate a pullback. The high beta warrants careful position sizing for risk management.
Beta
2.05
2.05x market volatility
Max Drawdown
-47.2%
Largest decline past year
52-Week Range
$1-$10
Price range past year
Annual Return
+291.6%
Cumulative gain past year
| Period | BFLY Return | S&P 500 |
|---|---|---|
| 1m | +24.1% | +0.1% |
| 3m | +28.6% | +5.7% |
| 6m | +68.5% | +8.5% |
| 1y | +291.6% | +20.3% |
| ytd | +86.9% | +10.1% |
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BFLY Fundamental Analysis
Revenue is growing strongly, with Q1 2026 revenue of $26.53 million representing 24.99% year-over-year growth, accelerating from the 9.3% growth in Q4 2025 ($31.51M vs $22.35M in prior year quarter). The revenue trajectory shows a clear upward trend, with sequential improvement from $21.49M in Q3 2025 and $23.38M in Q2 2025. Product revenue of $14.65M and software/services revenue of $11.88M in Q1 2026 indicate a balanced mix, with the software segment providing recurring revenue visibility. The company remains unprofitable, with a net loss of $12.68 million in Q1 2026, though this loss narrowed from $15.29 million in Q4 2025 and $33.97 million in Q3 2025. Gross margin improved dramatically to 68.9% in Q1 2026 from -17.5% in Q3 2025, reflecting better product mix and cost controls, though operating margin remains deeply negative at -50.8%. The balance sheet is healthy with $142.0 million in cash and minimal debt (debt-to-equity of 0.10). Free cash flow was negative $14.8 million in Q1 2026, but the company has sufficient liquidity to fund operations. ROE is -39.3%, reflecting ongoing losses, but the current ratio of 3.83 provides ample short-term cushion.
Quarterly Revenue
$26530000.0B
2026-03
Revenue YoY Growth
+25.0%
YoY Comparison
Gross Margin
68.9%
Latest Quarter
Free Cash Flow
$-18862000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is BFLY Overvalued?
Since net income is negative, the price-to-sales (PS) ratio is the primary valuation metric. The trailing PS ratio is 9.62x, while forward PS (based on estimated revenue of $220M) is approximately 4.27x, implying the market expects significant revenue growth to justify the current valuation. Compared to the medical devices industry average PS of roughly 4.5x, Butterfly trades at a 114% premium on trailing sales, reflecting its high growth and disruptive potential. However, on forward sales, the premium narrows to near parity, suggesting the market is pricing in the expected revenue ramp. Historically, Butterfly's PS ratio has ranged from 8.5x to 168.5x over the past five years. The current trailing PS of 9.6x is near the low end of its historical range, indicating that despite the stock's recent rally, valuation multiples have compressed significantly from the elevated levels seen in 2021. This compression suggests that the market has tempered its growth expectations, but the current level may offer a favorable entry if revenue growth continues to accelerate.
PE
-12.3x
Latest Quarter
vs. Historical
N/A
5-Year PE Range 17x~59x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
-12.0x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Butterfly Network's primary financial risk is its persistent unprofitability, with a net loss of $12.68M in Q1 2026 and an operating margin of -50.8%. While the company has $142M in cash, the negative free cash flow of -$14.8M per quarter implies a cash burn rate that, if unchanged, would deplete reserves in about 2.4 years. The company also faces revenue concentration risk as its product line is largely dependent on the Butterfly iQ+ probe, and any disruption in supply chain or technology could severely impact sales. Additionally, the negative ROE of -39.3% indicates poor capital efficiency, though this is typical for high-growth companies in investment phase.
Market & Competitive Risks: The stock's beta of 2.05 makes it highly sensitive to market downturns, and its trailing PS of 9.62x is a 114% premium to the industry average, leaving it vulnerable to multiple compression if growth slows. Competitive risks include larger medical device companies like GE Healthcare and Philips entering the handheld ultrasound space with established distribution networks. Regulatory risks are moderate, as the company's devices are FDA-cleared, but any changes in healthcare reimbursement policies could affect adoption. The recent rally of 314.8% over one year may have priced in optimistic expectations, increasing the risk of a correction if quarterly results disappoint.
Worst-Case Scenario: In a severe downturn, the stock could retest its 52-week low of $1.32, representing a -81.9% decline from the current price of $7.30. This scenario could be triggered by a combination of slowing revenue growth (e.g., below 10%), margin deterioration, and a broad market sell-off. The analyst low target of $5.25 implies a -28.1% downside, which is a more moderate bear case. The historical max drawdown of -47.22% suggests that even in normal volatility, investors could face significant losses. Given the high beta and negative earnings, the realistic downside from current levels is approximately -28% to the analyst low target, but could extend to -82% in a worst-case scenario.
