Butterfly Network, Inc. (BFLY): what the price requires

At today's price, Butterfly Network, Inc. (BFLY) is priced for today's economics sustained for ~36.0 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.

Generated: 2026-07-19 · Source: https://boothcheck.com/report/BFLY

Headline

FieldValue
TickerBFLY
CompanyButterfly Network, Inc.
Current price$7.94/sh
CompositionDevices and accessories (point-in-time) 65% / Software and other services (over time) 35%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basisrevenue-multiple
EV / sales paid19.9x
Steady-state operating margin assumed23.8%
Must persist for36.0y

The company earns no operating profit yet; the inversion runs on the revenue multiple and an assumed steady-state margin.

Solve inputs: computed at a 16.1% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~5.3 years.

Reconcile: at the x-ray's 9.3% required return this reads ~13.7 years; the models below use their own rates.

How unusual the bet is: elevated

ReferenceValue
vs own history-0.01σ
sustained it ~10 years at this level14%
implied end-window share0%

Valuation X-Ray

Every valuation family lands below the price. The price therefore requires assumptions beyond what those standard frames encode.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset11.22x2expensive
Earnings—0—
Relative4.96x2expensive
Growth7.83x2expensive

Families that call it expensive: Asset, Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.0%); the inversion above states its own rate.

Per-Model Detail (n=6)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$0.00—noNegative/zero FCF — equity value floored at $0
DCF Exit MultipleGrowth$0.00—noNegative/zero FCF or EBITDA — equity value floored at $0
Relative ValuationRelative$1.604.96xyesP/S fallback (negative EPS): Sector P/S 4.0x × TTM revenue — excluded from consensus
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$0.7510.59xyesBook value floor: BV/sh $0.75, ROE negative
Two-Stage Excess ReturnAsset$0.6711.85xyesBook value with convergence: BV/sh $0.75, ROE converges to ke
Discounted Future Market CapGrowth$5.391.47xyesRev $0.1B, growth 20% (input: historical growth; tapered), Terminal P/S: 9.8x / 12.0x / 14.2x (bear / base = today's held flat / bull, cap 12x)
Peter Lynch Fair ValueRelative$0.00—noNegative/zero EPS — earnings-based value floored at $0
Margin TrajectoryGrowth$0.5614.18xyesMargin ramp: -50% → 12% over 7yr, rev growth 20% (input: historical growth; tapered)
Earnings Power ValueEarnings——no—
Residual IncomeAsset——no—
Graham NumberAsset——no—
EV/EBITDA RelativeRelative——no—
FCF YieldEarnings——no—
SBC-Adj FCF YieldEarnings——no—
Ben Graham FormulaEarnings——no—
ROIC-Justified P/BAsset——no—
P/Sales SectorRelative$1.604.96xyesRevenue $0.10B × sector P/S 4.0x
PEG Fair ValueRelative——no—
Earnings YieldEarnings——no—
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net cash$138.0m
Interest coverage-60.6x
Share count CAGR (dilution)6.6%
Burning cashyes

Operating profit is negative or near zero and the company has no demonstrated through-cycle (mid-cycle) operating margin to normalize against, so years-to-repay cannot be computed honestly.

Bullet Takeaways

Bull Case

What the standard models miss about Butterfly Network is that they are valuing a hardware company while the business is becoming a software and platform company. On the surface, Butterfly sells a handheld ultrasound device, the iQ probe, which prices like a one-time product sale. But the value migrating into the model is recurring and high-margin: software subscriptions, AI tools, and the Butterfly Embedded licensing business that puts the company's chip-based imaging inside other manufacturers' devices. Embedded revenue grew 147% in the quarter, and overall gross margin rose to 68.9% from 63.0% as the mix shifted toward software and the higher-priced iQ3 device. A revenue multiple computed on today's blended sales understates a business whose economics are tilting toward software margins.

The technology is genuinely differentiated, which is what gives the platform a chance. Butterfly's probe uses a semiconductor chip rather than the traditional piezoelectric crystals, so a single handheld device can do what a cart of specialized probes once did, at a fraction of the cost. The 10-K points to the newest Butterfly iQ3 device demonstrating impressive uptake since its release with best-in-class image quality, and to expansion into the veterinary market alongside human medicine. The company also highlighted the first FDA-cleared blind-sweep AI tool, which lets less-trained users capture diagnostic images, the kind of capability that widens the addressable market from radiology departments to primary care, field medicine, and the developing world.

The losses are narrowing, which is the inflection a growth-stage bull case needs to see. Net loss narrowed to $12.7 million from $14.0 million, and the adjusted EBITDA loss improved to $6.1 million from $9.1 million a year earlier, evidence of operating leverage as revenue scales against a fixed cost base. The balance sheet funds the journey: Butterfly holds net cash of about $138 million and carries essentially no debt, so it can pursue the platform build-out without an imminent financing cliff. The reframe is that this is not a struggling device maker; it is an imaging-platform company in the early innings of monetizing a genuinely novel technology.

Bear Case

The cleanest way to frame the bear case is through the model disagreement, because the methods are unusually unanimous and unusually grim. No valuation family reaches today's price. The asset-based lens reads it at nearly thirteen times the static value, the peer-multiple lens at almost six times, and even the forward-growth method falls well short. When every approach, including the one that credits future growth, says the price is far above what it supports, the conservative methods are not being too cautious; they are telling you the price embeds a future no standard frame can underwrite. At roughly 24 times revenue for a company still losing money, the burden of proof sits entirely on a multi-decade growth story.

The implied assumption makes that explicit and should give a holder pause. To support the price, Butterfly has to grow revenue at its self-funding ceiling for something on the order of three to four decades while eventually reaching an operating margin near 24%, against a current operating margin deeply negative at about minus 80%. That is not a forecast so much as an extrapolation of the current growth rate across an entire generation, and history is unkind to such persistence: only a small fraction of fast-growers sustain that kind of pace even ten years. The company is guiding to roughly 20% to 24% revenue growth this year, healthy but a long way from the trajectory the price assumes.

The competitive and execution risks are real beneath the valuation. The 10-K is candid that the company has a limited history of generating revenue and has incurred significant losses since inception, and that it faces significant competition from companies, many of which have greater resources, including the large established imaging vendors. A novel chip-based probe is a genuine edge, but incumbents with deep balance sheets can fund their own handheld and AI efforts. With net cash of about $138 million and a continuing cash burn, the company has runway but not indefinite runway, and a growth-stage business that needs to raise capital from a depressed share price dilutes the very holders the price assumes will be rewarded. The bear is not that the technology fails; it is that the price has already paid for decades of flawless execution that have not happened yet.

Valuation

Because Butterfly is not yet earning an operating profit, the price is set against its sales, and the multiple is extreme: about 24 times revenue. That alone signals the market is valuing a future business, not the present one. The implied assumption spells out how far ahead the price reaches: revenue growing at its self-funding ceiling for roughly three to four decades while the company matures into an operating margin near 24%, from a deeply negative position today. This is a bound on what the price assumes, not a measured forecast, and it is an aggressive one.

The method disagreement is total, which is itself the signal. No family reaches the price. The asset-based lens reads it at nearly thirteen times the static value, peer multiples at almost six times, and even the forward-growth method falls short. When every approach says expensive, including the growth lens designed to credit future expansion, the price rests on something outside the standard frames, here a bet that the platform and software transition turns a small, loss-making device maker into a high-margin imaging franchise. The honest read is that this is a price beyond what any conventional method supports, the kind of valuation that depends on the optionality of the technology rather than the arithmetic of the current business.

Solvency is the reassuring counterweight and the right place to bound the downside. Butterfly holds net cash of about $138 million against essentially no debt, so the company can fund its continuing losses for a meaningful stretch without an immediate raise. But the company is still burning cash, with an adjusted EBITDA loss guided to $21 million to $25 million for the year, so the runway is finite and the clock matters. The downside is not insolvency in the near term; it is the multiple and the dilution risk. A buyer at this price is underwriting decades of execution, and the cash position buys the company time to attempt it, not protection for the entry price if the platform thesis takes longer than the market assumes.

Catalysts

Butterfly Network's first quarter beat expectations and showed the growth engines engaging. Revenue rose 25% to $26.5 million from $21.2 million a year earlier, and gross margin expanded to 68.9% from 63.0%, lifted by higher-margin Butterfly Embedded licensing and a richer iQ3 device mix. Losses narrowed on both measures, with net loss of $12.7 million versus $14.0 million and an adjusted EBITDA loss of $6.1 million versus $9.1 million, the operating leverage a scaling growth company needs.

The standout was the platform expansion. Butterfly Embedded revenue grew 147% as the company licenses its chip-based imaging into other manufacturers' devices, and management highlighted the first FDA-cleared blind-sweep AI tool, which lets less-trained users capture diagnostic images and opens new clinical and global partnership opportunities. These are the higher-margin, recurring lines that the bull case rests on.

Management reaffirmed full-year 2026 revenue guidance of $117 million to $121 million, roughly 20% to 24% growth, and an adjusted EBITDA loss outlook of $21 million to $25 million, signaling continued but narrowing losses. The signposts ahead are the trajectory of the Embedded and software lines, additional partnership and AI-clearance milestones, and the pace of the cash burn against the roughly $138 million cash balance, which together determine whether the platform transition arrives before the runway tightens.

Peer Cohorts (Per Segment, With Filing Citations)

Butterfly Network (consolidated) (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

Sources

Butterfly Network Q1 2026 results · Butterfly Network Q1 2026 earnings call

View the full interactive BFLY report on boothcheck