Butterfly Network stock initiated with Buy rating at Craig-Hallum

Published 01/07/2025, 15:10
Butterfly Network stock initiated with Buy rating at Craig-Hallum

Investing.com - Craig-Hallum initiated coverage on Butterfly Network (NYSE:BFLY) with a Buy rating and a $3.00 price target on Tuesday. The stock, currently trading at $2.00, has shown significant volatility with a 130% return over the past year, according to InvestingPro data.

The firm highlighted Butterfly Network’s handheld point-of-care ultrasound (POCUS) device, which offers advantages over traditional cart-based ultrasound machines by being compact, affordable, and smartphone-compatible. Unlike conventional ultrasound machines that cost over $60,000, Butterfly’s single-probe solutions range from $2,700 to $3,900 with a $420 annual subscription. This innovative approach has helped drive impressive revenue growth, with InvestingPro reporting a 26% year-over-year increase in the last twelve months.

Craig-Hallum noted that Butterfly’s semiconductor-based ultrasound-on-a-chip platform differentiates it from competitors who still rely on legacy piezoelectric technology. The platform provides efficient performance with a universal transducer and clear pathways for image quality improvements.

The research firm emphasized Butterfly’s existing direct-to-consumer sales channel and presence in medical schools, with potential growth through partnerships and licensing agreements with large organizations. Craig-Hallum estimates the market for legacy cart-based ultrasounds at approximately $6 billion across the US and EU.

Craig-Hallum projects Butterfly Network could reach $500 million in revenue within a decade, suggesting the stock could exceed $10 per share at a 5x multiple, representing more than a five-fold increase from current levels. The company maintains strong financial health with a current ratio of 6.06 and more cash than debt on its balance sheet. For deeper insights into Butterfly Network’s growth potential and comprehensive analysis, check out the detailed Pro Research Report available on InvestingPro, which covers over 1,400 US stocks.

In other recent news, Butterfly Network reported first-quarter 2025 earnings, surpassing analysts’ expectations with an earnings per share (EPS) of -$0.04 compared to the forecasted -$0.07. The company’s revenue reached $21.2 million, slightly exceeding the anticipated $21.05 million and reflecting a 20% year-over-year increase. This growth was driven by successful product launches and increased adoption in medical schools and hospitals. In addition to strong financial performance, Butterfly Network launched new products, including the IQ3 probe and the Butterfly Garden AI marketplace. For the second quarter of 2025, the company projects revenue between $23 million and $24.5 million.

In another development, TD Cowen maintained its Buy rating for Butterfly Network with a $5.00 price target, following the European Commission’s review of the company’s request to revoke an EU market exemption for lead piezoelectric crystals. This review could impact Butterfly Network’s market position and potentially open the market to alternative technologies offered by the company. Investors and stakeholders are closely monitoring this regulatory process, which may lead to significant changes in the European market for handheld ultrasound devices. The ongoing developments reflect Butterfly Network’s strategic initiatives and the potential for future growth.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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