Why Butterfly Network Shares Have Flown Higher Today



What happened

Actions of Butterfly Network (NYSE: BFLY) flew higher today, up 10% as of 12:40 p.m. EDT, after receiving a bullish initiation from Wall Street. Cowen began hedging the healthcare company with an outperformance rating (equivalent to a purchase).

So what

Analyst Joshua Jennings gave Butterfly Network an outperformance rating and a price target of $ 20, representing about 43% up from Friday’s closing price. Butterfly Network sells its Butterfly iQ +, a portable ultrasound device, which works with a mobile app. Healthcare providers pay a subscription to use the software platform.

Butterfly iQ + and the accompanying application. Image source: Papillon 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. “The democratization of access to cutting-edge medical imaging should create clinical, societal and shareholder value.

Now what

Jennings predicts strong adoption of Butterfly iQ and believes 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 released first quarter tax results last month, which disappointed investors. Butterfly Network’s forecast predicted 2021 revenue to range between $ 76 million and $ 80 million, which should translate into adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of minus $ 140 million to minus $ 160 million. dollars. The net loss for the year is expected to be between $ 135 million and $ 155 million.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.



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