Butterfly Network, Inc.
BFLY
$9.55
+4.14%
Butterfly Network, Inc. is a digital health company that has revolutionized the ultrasound market with its handheld, whole-body ultrasound device powered by proprietary Ultrasound-on-Chip technology. The company's flagship product, Butterfly iQ+, integrates cloud-connected software and hardware, making imaging accessible and affordable for healthcare professionals worldwide. As a pioneer in point-of-care ultrasound, Butterfly Network is positioned as a disruptor in the medical devices industry, challenging traditional, cart-based systems. The current investor narrative centers on the company's accelerating revenue growth, driven by expanding adoption of its platform and a strategic shift toward software and services, which has fueled a remarkable stock rally over the past year. However, the company remains unprofitable, and investors are closely watching its path to profitability and ability to scale its business model.…
BFLY
Butterfly Network, Inc.
$9.55
Investment Opinion: Should I buy BFLY Today?
Rating: Hold. The stock is a high-growth but high-risk investment, with a Strong Buy consensus from analysts but a current price that already exceeds the average target. The thesis is that BFLY's disruptive technology and accelerating revenue growth justify a premium valuation, but the lack of profitability and extreme valuation multiples limit upside. Supporting evidence includes 25% YoY revenue growth, gross margin expansion to 68.9%, a strong balance sheet with low debt, and a forward PS of 4.27x based on estimated revenue of $220M. However, the trailing PS of 9.62x is 175% above the industry average, and the stock trades 2.5% above the average analyst target of $9.31. The biggest risks are a slowdown in growth, continued cash burn, and valuation compression. This Hold would upgrade to Buy if the stock pulls back to $7.00 (near the 52-week low of $1.39) or if revenue growth sustains above 30% with improving margins. It would downgrade to Sell if revenue growth decelerates below 15% or if cash burn accelerates. Overall, the stock is overvalued relative to its history and peers, but the growth potential warrants a neutral stance.
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BFLY 12-Month Price Forecast
The AI assessment is neutral with medium confidence. BFLY's growth and margin expansion are positive, but the extreme valuation and lack of profitability create significant risk. The stock's price already reflects much of the optimism, and the near-term upside is limited by the analyst target. A more bullish stance would be warranted if the company demonstrates sustained growth above 30% and a clear path to positive cash flow. Conversely, a bearish stance would be triggered by a deceleration in growth or an unexpected increase in cash burn.
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 -2.5% versus the current price.
Average Target
$9.31
0 analysts
Implied Upside
-2.5%
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 'Strong Buy' (mean rating of 1.0). The average price target is $9.31, which is slightly below the current price of $9.55, implying a modest downside of -2.5%. The distribution of ratings is bullish, with all analysts rating it a Buy, and no Hold or Sell ratings. The target price range spans from a low of $5.25 to a high of $11.00, indicating a wide dispersion in expectations. The high target of $11.00 suggests that some analysts see significant upside, potentially driven by continued revenue acceleration and margin expansion, while the low target of $5.25 implies concerns about the company's ability to achieve profitability and potential competitive pressures. Recent institutional ratings have been consistently positive, with firms like TD Cowen and Lake Street maintaining Buy ratings in 2026, and no downgrades have been observed. The wide target spread (from $5.25 to $11.00) reflects high uncertainty about the company's future, which is typical for a high-growth, unprofitable company in the medical device space. Overall, the analyst sentiment is strongly bullish, but the current price has already surpassed the average target, suggesting that the stock may be ahead of fundamentals in the near term.
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 strong balance sheet, while the bear case highlights persistent losses, extreme valuation (9.6x PS), and high volatility. Currently, the bull side has stronger evidence given the recent growth inflection and analyst support, but the stock's price already reflects much of the optimism. The central tension is whether the company can translate its growth into profitability before cash reserves deplete, or if the market's high expectations will lead to a sharp correction if growth decelerates.
Bullish
- Revenue growth accelerating to 25% YoY: Q1 2026 revenue of $26.53M grew 24.99% YoY, up from 4.4% growth in Q4 2025, indicating a clear acceleration. This momentum is driven by expanding adoption of the Butterfly iQ+ and a growing software/services mix.
- Gross margin expansion to 68.9%: Gross margin improved to 68.92% in Q1 2026 from 63.04% a year ago, reflecting a favorable product mix and cost efficiencies. This trend supports the path to profitability as scale increases.
- Strong balance sheet with low debt: Current ratio of 3.83 and debt-to-equity of 0.104 indicate a healthy liquidity position. Cash of $141.97M provides a runway to fund operations without immediate dilution risk.
- Analyst consensus is Strong Buy: All 4 analysts rate BFLY a Buy, with a mean rating of 1.0. The average price target of $9.31 is close to the current price, but the high target of $11.00 implies 15% upside, reflecting confidence in the growth story.
Bearish
- Deeply unprofitable with negative margins: Q1 2026 net loss of $12.68M and operating margin of -50.8% show that expenses still far outpace revenue. Even with strong growth, the company is burning cash, with negative FCF of -$14.84M in Q1.
- Valuation premium is extreme: Trailing PS ratio of 9.62x is 175% above the industry average of 3.5x. EV/Sales of 20.83x implies the market is pricing in massive future growth, leaving little room for error.
- Stock trades above average analyst target: At $9.55, the stock is 2.5% above the average analyst target of $9.31, suggesting limited near-term upside. The low target of $5.25 implies a potential downside of -45% if growth disappoints.
- High volatility and beta of 2.08: With a beta of 2.084, BFLY is more than twice as volatile as the market. This amplifies downside risk, especially in a market downturn, and could lead to sharp drawdowns.
BFLY Technical Analysis
Butterfly Network's stock has exhibited a powerful uptrend over the past year, with a 1-year price change of +587.05%, dramatically outperforming the S&P 500's +20.48% gain. The current price of $9.55 sits near the upper end of its 52-week range, at approximately 95% of the range (calculated as (9.55 - 1.39) / (10.05 - 1.39) = 0.95), indicating strong momentum and bullish sentiment. This positioning near the 52-week high of $10.05 suggests the stock is in a robust uptrend, though it may be susceptible to short-term overextension. The stock's beta of 2.084 implies it is more than twice as volatile as the market, amplifying both upside and downside moves.
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
+587.1%
Cumulative gain past year
| Period | BFLY Return | S&P 500 |
|---|---|---|
| 1m | +44.5% | +2.5% |
| 3m | +113.6% | +2.7% |
| 6m | +220.5% | +11.1% |
| 1y | +587.1% | +20.5% |
| ytd | +154.7% | +12.3% |
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BFLY Fundamental Analysis
Butterfly Network's revenue has shown a strong growth trajectory, with Q1 2026 revenue of $26.53 million, representing a 24.99% year-over-year increase from $21.23 million in Q1 2025. This growth is accelerating, as Q1 2026's growth rate of 24.99% exceeds the 4.4% growth seen in Q4 2025 (revenue of $31.51 million vs. $22.35 million in Q4 2024, though the comparison is distorted by seasonality). The company's revenue mix is diversifying, with product revenue of $14.65 million and software and other services revenue of $11.88 million in the most recent quarter, indicating a growing recurring revenue stream. Despite the top-line growth, the company remains unprofitable, with a net loss of $12.68 million in Q1 2026, though this loss has narrowed from $13.97 million in Q1 2025. Gross margin improved significantly to 68.92% in Q1 2026, up from 63.04% in the year-ago quarter, reflecting a favorable product mix and cost efficiencies. However, operating margin remains deeply negative at -50.84%, and the company's net margin is -47.78%, indicating that operating expenses, particularly R&D and sales & marketing, are still outpacing revenue growth. The balance sheet is relatively healthy, with a current ratio of 3.83 and a low debt-to-equity ratio of 0.104, but the company is burning cash, with negative free cash flow of -$14.84 million in Q1 2026 and -$18.86 million on a trailing twelve-month basis. The company's ROE is -39.32%, reflecting significant losses relative to shareholder equity, and its cash position of $141.97 million provides a runway, but continued losses will require additional funding or a path to profitability.
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 that Butterfly Network has negative net income, the price-to-sales (PS) ratio is the most appropriate valuation metric. The trailing PS ratio is 9.62x, while the forward PS ratio (based on estimated revenue of $220 million) is approximately 4.27x (market cap of $939.07 million / $220 million). The wide gap between trailing and forward PS suggests the market expects significant revenue growth, which aligns with the company's recent acceleration. Compared to the industry average PS ratio of 3.5x (from valuation data), Butterfly Network trades at a substantial premium of 175% (9.62x vs. 3.5x). This premium is justified by the company's superior growth rate (25% YoY) and its disruptive technology, but it also implies high expectations that could lead to volatility if growth disappoints. Historically, the stock's PS ratio has ranged from a low of 8.54x in Q2 2024 to a high of 168.52x in Q2 2021, and the current 9.62x is near the lower end of that range, suggesting that despite the recent rally, the valuation is not at historical extremes. The EV/Sales ratio of 20.83x is also elevated, reflecting the market's optimism about the company's future potential.
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 and operational risks are substantial. The company is deeply unprofitable, with a net loss of $12.68M in Q1 2026 and negative operating margin of -50.8%. Despite a healthy current ratio of 3.83, the company is burning cash at a rate of -$14.84M per quarter, and with only $141.97M in cash, it has roughly 9-10 quarters of runway before needing additional funding. The negative ROE of -39.3% indicates that shareholder equity is being eroded, and the reliance on continued revenue growth to justify the valuation is a key vulnerability. If growth stalls, the company may need to raise capital, diluting existing shareholders.
FAQ
The key risks are: 1) Financial risk: The company is unprofitable with negative operating margin of -50.8% and negative FCF of -$14.84M in Q1 2026, which could lead to dilution if cash runs out. 2) Valuation risk: The stock trades at a 175% premium to the industry PS average, leaving little room for error. 3) Competitive risk: Larger medical device companies could enter the handheld ultrasound market, pressuring margins. 4) Market risk: With a beta of 2.08, the stock is highly sensitive to market downturns. The most severe risk is a combination of growth deceleration and cash burn, which could lead to a -45% decline to the analyst low target of $5.25.
The 12-month forecast is mixed. In the base case (45% probability), the stock trades in the $8.00-$9.50 range, near the average analyst target of $9.31. In the bull case (30% probability), it could reach $10.05-$11.00 if growth accelerates and the company signs major deals. In the bear case (25% probability), it could fall to $5.25-$7.00 if growth decelerates or cash burn worsens. The most likely scenario is the base case, where the stock remains range-bound as the market waits for evidence of profitability. Investors should watch the next earnings report for revenue growth and margin trends.
BFLY is overvalued relative to its industry. The trailing PS ratio of 9.62x is 175% above the industry average of 3.5x, and the EV/Sales of 20.83x is extremely high. However, the forward PS of 4.27x (based on estimated revenue of $220M) suggests that the market is pricing in significant growth. Historically, the stock's PS has ranged from 8.54x to 168.52x, so the current level is near the lower end of its own range, indicating that the valuation is not at historical extremes. The market is expecting strong revenue growth and margin expansion, and if the company delivers, the valuation could be justified. But if growth disappoints, the stock could be vulnerable to a sharp de-rating.
BFLY is a high-risk, high-reward stock. The company is growing revenue at 25% YoY and has a strong balance sheet, but it is deeply unprofitable and trades at a premium valuation (9.6x PS). Analysts are bullish (Strong Buy), but the average target of $9.31 is below the current price of $9.55, implying limited upside. The stock could be a good buy for aggressive growth investors who believe in the long-term potential of handheld ultrasound, but it is not suitable for conservative investors. A better entry point might be on a pullback to the $7-$8 range, which would offer a more favorable risk/reward.
BFLY is more suitable for long-term investors with a high risk tolerance. The company is in a growth phase, and its technology has significant potential, but it is not yet profitable. Short-term trading is extremely risky due to the stock's high volatility (beta of 2.08) and its 587% rally, which could lead to sharp pullbacks. For long-term investors, a minimum holding period of 3-5 years is recommended to allow the company to scale and potentially reach profitability. The stock is not suitable for income investors as it pays no dividend. Given the high uncertainty, position sizing should be conservative.