Butterfly Network (BFLY): Evaluating Valuation After New Midjourney Partnership and Compass AI Launch

Butterfly Network (BFLY) is getting plenty of attention after announcing a new partnership with Midjourney for its ultrasound-on-chip technology, along with the rollout of its next-generation Compass AI platform for healthcare providers. Both events have added new momentum to the stock.

See our latest analysis for Butterfly Network.

Momentum around Butterfly Network has surged following major product and partnership announcements, with the share price climbing 43% over the past month and 91% in the last 90 days. While recent moves have attracted short-term traders, the one-year total shareholder return remains slightly negative. This highlights a longer-term recovery still in progress as the company pivots toward profitability and broader adoption.

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With shares still trading at a discount to analyst price targets despite this recent surge, the question for investors is clear: is there real upside left for Butterfly Network, or has the market already priced in its future growth?

Most Popular Narrative: 14% Undervalued

Butterfly Network's most widely followed narrative places its fair value at $3.58, which is notably higher than the last close price of $3.08. This gap signals that analysts see meaningful upside, fueled by underlying catalysts unique to Butterfly's business transformation.

"The launch of next-generation Compass AI software, with automated documentation and workflow enhancements, is expected to drive increased enterprise adoption and higher software subscription revenues. This development could improve gross margin mix and boost earnings through a greater share of recurring, high-margin digital revenue."

Read the complete narrative.

Want to know the quantitative force behind this bullish outlook? The most aggressive part of this narrative is just how high profitability and revenue growth could soar in the next few years. Which projections unlock this premium? Find out what makes this valuation stand out from the crowd.

Result: Fair Value of $3.58 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent delays in enterprise deals or slow domestic software adoption could undermine Butterfly Network's ambitious path to sustained profitability and broader healthcare impact.

Find out about the key risks to this Butterfly Network narrative.

Another View: Multiples Tell a Cautionary Story

While analysts believe Butterfly Network is undervalued, a look at the price-to-sales ratio raises questions. The company trades at 8.8 times sales, which is significantly higher than the industry average of 3.3 times and the peer average of just 1.2. The fair ratio, which the market could move toward, is only 3.4 times sales.

This kind of premium suggests either strong confidence or elevated risk for investors. If sentiment shifts, today's price could be vulnerable to a reset, or this could simply reflect the price of growth in a fast-changing industry.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Butterfly Network Narrative

If you see things differently or want to explore the data firsthand, you can quickly craft your own Butterfly Network story in just a few minutes using the available tools. Do it your way.

A great starting point for your Butterfly Network research is our analysis highlighting 3 key rewards and 4 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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