Shares of Butterfly Network (BFLY 28.70%) have flown higher today, up by 10% as of 12:40 p.m. EDT, after getting a bullish initiation from Wall Street. Cowen started coverage of the healthcare company with an outperform rating (equivalent to a buy).
Analyst Joshua Jennings assigned Butterfly Network an outperform rating alongside a price target of $20, representing approximately 43% upside from Friday's closing price. Butterfly Network sells its Butterfly iQ+, a handheld ultrasound device, that works with a mobile app. Healthcare providers pay a subscription fee to use the software platform.
"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. "Democratizing access to advanced medical imaging should build clinical, societal, and shareholder value."
Jennings is forecasting strong adoption of Butterfly iQ and believes that 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 reported fiscal first-quarter results last month, which disappointed investors. Butterfly Network's guidance called for 2021 revenue in the range of $76 million to $80 million, which should result in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of negative $140 million to negative $160 million. Net loss for the year is expected to be $135 million to $155 million.