Butterfly Network, Inc. (NYSE:BFLY) Just Reported Earnings, And Analysts Cut Their Target Price

It's been a good week for Butterfly Network, Inc. (NYSE:BFLY) shareholders, because the company has just released its latest annual results, and the shares gained 4.1% to US$2.29. Sales hit US$73m in line with forecasts, although the company reported a statutory loss per share of US$0.84 that was somewhat smaller than the analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Butterfly Network

Following the latest results, Butterfly Network's three analysts are now forecasting revenues of US$87.7m in 2023. This would be a solid 19% improvement in sales compared to the last 12 months. Losses are supposed to decline, shrinking 18% from last year to US$0.69. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$89.9m and losses of US$0.82 per share in 2023. Although the revenue estimates have fallen somewhat, Butterfly Network'sfuture looks a little different to the past, with a cut to the loss per share forecasts in particular.

The analysts have cut their price target 27% to US$6.00per share, suggesting that the declining revenue was a more crucial indicator than the forecast reduction in losses. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Butterfly Network, with the most bullish analyst valuing it at US$7.50 and the most bearish at US$4.50 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Butterfly Network's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 19% growth on an annualised basis. This is compared to a historical growth rate of 28% over the past three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.4% annually. Even after the forecast slowdown in growth, it seems obvious that Butterfly Network is also expected to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. They also downgraded their revenue estimates, although industry data suggests that Butterfly Network's revenues are expected to grow faster than the wider industry. Even so, long term profitability is more important for the value creation process. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Butterfly Network going out to 2024, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 3 warning signs for Butterfly Network you should be aware of.

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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.