Butterfly Network, Inc.
BFLY
$9.70
+9.85%
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. The company operates in the medical devices industry, offering a pocket-sized probe that connects to a mobile app, making imaging accessible and affordable for healthcare professionals. Butterfly Network is a market disruptor, challenging traditional bulky and expensive ultrasound systems with its semiconductor-based solution. The current investor narrative centers on the company's rapid revenue growth, improving gross margins, and strategic shift toward software and services, which has driven a remarkable stock rally over the past year despite ongoing profitability challenges.…
BFLY
Butterfly Network, Inc.
$9.70
Investment Opinion: Should I buy BFLY Today?
Rating: Hold. The consensus is Buy, but the average target of $7.06 is essentially at the current price of $7.11, implying no upside. The thesis is that BFLY's disruptive technology and accelerating growth (25% YoY) justify a premium, but the valuation leaves little room for error. Supporting evidence includes: PS ratio of 9.62x vs. industry 2.5x, gross margin of 68.9% vs. industry 46.9%, revenue growth of 25% YoY, and a net loss that narrowed 63% from Q3 2025. However, the stock is trading near its average target, and the low target of $5.25 suggests 26% downside. This Hold would upgrade to Buy if the PS ratio compresses below 7x or if revenue growth accelerates above 30%, and downgrade to Sell if growth decelerates below 15% or if the company announces a dilutive capital raise. Overall, the stock is overvalued relative to its history and peers, but the growth and margin trajectory provide some justification.
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BFLY 12-Month Price Forecast
The AI assessment is neutral with medium confidence. The company's growth and margin expansion are positive, but the valuation is stretched and profitability remains elusive. The stock's high beta (2.05) and recent volatility suggest that sentiment can shift quickly. I would upgrade to bullish if revenue growth accelerates above 30% and the company shows a clear path to profitability, or if the stock pulls back to a more reasonable PS ratio below 7x. I would downgrade to bearish if growth decelerates below 15% or if the company announces a dilutive capital raise.
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 $9.31 and implied upside of -4.0% versus the current price.
Average Target
$9.31
0 analysts
Implied Upside
-4.0%
vs. current price
Analyst Count
—
covering this stock
Price Range
$5 - $11
Analyst target range
Butterfly Network has coverage from 4 analysts, with a consensus recommendation of 'Buy' (though the data shows 'none' for recommendation, the institutional ratings show multiple Buy ratings). The average target price is $7.06, which is slightly below the current price of $7.11, implying a marginal downside of -0.7%. The target range spans from $5.25 to $11.00, with the low target suggesting a potential 26% downside, while the high target implies a 55% upside. The wide spread indicates high uncertainty about the company's future, but the recent analyst actions (e.g., Freedom Broker and TD Cowen reiterating Buy in early 2026) suggest a positive sentiment. The consensus leans bullish, but the lack of a clear average upside suggests that the stock may be fairly valued at current levels.
Bulls vs Bears: BFLY Investment Factors
Butterfly Network presents a classic high-growth, high-risk investment. The bull case is anchored by accelerating revenue growth (25% YoY), expanding gross margins (68.9%), and a narrowing net loss, supported by a strong balance sheet. The bear case centers on a rich valuation (PS 9.62x vs. 2.5x industry), persistent unprofitability, and a consensus target that offers no upside. Currently, the bull evidence is stronger on operational metrics, but the valuation and lack of profitability keep risk elevated. The key tension is whether revenue growth and margin expansion can continue at a pace that justifies the premium, or if the market will reprice the stock downward if growth decelerates.
Bullish
- Revenue growth accelerating to 25% YoY: Q1 2026 revenue of $26.53M grew 24.99% YoY, up from $21.23M in Q1 2025. Sequential growth from Q3 2024 ($20.56M) to Q4 2025 ($31.51M) shows consistent momentum, driven by both product sales and software/services adoption.
- Gross margin expansion to 68.9%: Gross margin improved to 68.9% in Q1 2026, up from 63.0% in Q1 2025 and well above the industry average of 46.9%. This reflects a favorable mix shift toward software and services, which carry higher margins.
- Net loss narrowing significantly: Net loss improved to -$12.68M in Q1 2026 from -$33.97M in Q3 2025, a 63% reduction. Operating efficiency is improving as revenue scales, with EBITDA loss shrinking from -$31.69M to -$10.59M over the same period.
- Strong balance sheet with low debt: Debt-to-equity is just 0.10, and current ratio is 3.83, indicating ample liquidity. The company has minimal leverage, reducing financial distress risk despite ongoing losses.
Bearish
- Stock trades at 285% premium to industry PS: PS ratio of 9.62x vs. industry average of 2.5x. Even with high growth, the valuation implies aggressive expectations; any growth disappointment could trigger multiple compression.
- Persistent unprofitability and negative cash flow: Net margin is -78.95%, and free cash flow TTM is -$18.86M. The company has not demonstrated a clear path to profitability, with operating margin at -88.5% in Q1 2026.
- Average analyst target implies downside: Average target of $7.06 is 0.7% below the current price of $7.11, suggesting limited upside. The low target of $5.25 implies 26% downside, reflecting high uncertainty.
- High volatility and speculative trading: Beta of 2.05 and a 1-year price change of +315.79% indicate extreme volatility. The stock has already pulled back 27% from its 52-week high of $9.69, showing susceptibility to sharp corrections.
BFLY Technical Analysis
Butterfly Network's stock has experienced a dramatic uptrend over the past year, with a 1-year price change of +315.79%, significantly outperforming the S&P 500's +18.19% gain. The current price of $7.11 sits at 69.5% of its 52-week range (between $1.32 low and $9.69 high), indicating the stock is in the upper half of its range but has pulled back from its highs. This positioning suggests strong momentum but also potential overextension, as the stock has more than quadrupled from its lows, reflecting a speculative fervor around the company's growth prospects.
Beta
2.08
2.08x market volatility
Max Drawdown
-40.6%
Largest decline past year
52-Week Range
$1-$10
Price range past year
Annual Return
+629.3%
Cumulative gain past year
| Period | BFLY Return | S&P 500 |
|---|---|---|
| 1m | +21.6% | +2.4% |
| 3m | +133.2% | +4.7% |
| 6m | +195.7% | +11.7% |
| 1y | +629.3% | +21.3% |
| ytd | +158.7% | +13.4% |
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BFLY Fundamental Analysis
Butterfly Network's revenue trajectory has been robust, with Q1 2026 revenue of $26.53 million, representing a 24.99% year-over-year growth rate. This growth is accelerating, as Q1 2026 revenue increased from $21.23 million in Q1 2025, and the company has consistently grown revenue from $20.56 million in Q3 2024 to $31.51 million in Q4 2025. The growth is driven by both product sales ($14.65 million) and software/services ($11.88 million), with the latter showing strong adoption. However, the company remains unprofitable, with a net loss of $12.68 million in Q1 2026, though the net loss has narrowed from $33.97 million in Q3 2025, indicating improving operational efficiency.
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?
Given Butterfly Network's negative net income, the price-to-sales (PS) ratio is the most appropriate valuation metric. The current PS ratio is 9.62x, which is elevated compared to the industry average of 2.5x, representing a 285% premium. This premium is justified by the company's rapid revenue growth and expanding gross margins (68.9% in Q1 2026 vs. 46.9% industry average), but it also reflects high market expectations. Historically, the PS ratio has ranged from 8.5x to 140x over the past five years, with the current level near the lower end of that range, suggesting the stock is relatively cheaper than its historical average, though still expensive on an absolute basis.
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 risks are significant. The company is unprofitable with a net margin of -78.95% and negative free cash flow of -$18.86M TTM. While the balance sheet is solid (debt-to-equity 0.10, current ratio 3.83), the company burns cash to fund operations, and if revenue growth stalls, it may need to raise capital, diluting shareholders. The gross margin improvement to 68.9% is positive, but operating expenses remain high (SGA $22.24M in Q1 2026), leading to an operating margin of -88.5%. Revenue concentration in hardware (55% of sales) adds cyclicality, and the company's reliance on continued growth to justify its valuation amplifies downside risk.
FAQ
The key risks are: 1) Financial: persistent losses and negative cash flow, with a net margin of -78.95% and FCF of -$18.86M TTM, which could lead to dilution if capital is needed. 2) Valuation: the stock trades at a 285% premium to the industry PS ratio, leaving little room for error. 3) Competitive: larger medical device companies could enter the handheld ultrasound market, pressuring margins. 4) Macro: with a beta of 2.05, the stock is highly sensitive to market swings. The most severe risk is a growth deceleration, which could cause the stock to fall to the analyst low target of $5.25, a 26% downside.
The 12-month forecast is mixed. The bull case (25% probability) targets $9.00-$11.00, driven by accelerating growth and profitability. The base case (50% probability) targets $6.50-$8.00, in line with the analyst average of $7.06. The bear case (25% probability) targets $4.00-$5.25, if growth decelerates or competitive pressures intensify. The most likely scenario is the base case, assuming revenue growth continues around 25% and the company makes progress on margins but remains unprofitable.
BFLY is overvalued relative to its industry peers, with a PS ratio of 9.62x versus the industry average of 2.5x. However, this premium is justified by the company's rapid revenue growth (25% YoY) and superior gross margins (68.9% vs. 46.9%). Historically, the PS ratio has ranged from 8.5x to 140x, so the current level is near the lower end of that range, suggesting it is relatively cheaper than its own history. The market is pricing in continued strong growth and margin expansion, but any disappointment could lead to multiple compression.
BFLY is a high-risk, high-reward stock. The consensus is Buy, but the average target of $7.06 is essentially at the current price of $7.11, implying no upside. The stock trades at a PS ratio of 9.62x, a 285% premium to the industry average, reflecting high growth expectations. The biggest downside risk is a deceleration in revenue growth, which could trigger a valuation de-rating. For investors with a high risk tolerance and a long-term horizon, BFLY could be a good buy if they believe in the company's growth story, but for conservative investors, the risk is too high.
BFLY is more suitable for long-term investors with a high risk tolerance, given its high volatility (beta 2.05) and early-stage growth profile. The company is not yet profitable, and the stock has experienced extreme price swings, making it unsuitable for short-term trading unless one can tolerate significant risk. A minimum holding period of 3-5 years is recommended to allow the company to scale and potentially achieve profitability. Short-term traders may find opportunities, but the risk of sharp corrections is high, as seen in the recent pullback from $9.69 to $7.11.