Butterfly Network Inc.

Butterfly Network Inc. (NYSE: BFLY) is a digital healthcare company that aims to make medical imaging available to individuals worldwide and contributing to the goal of global health equality. The company has created an innovative single-probe, point-of-care ultrasound system for the entire body through advanced technology.

Recent Financial and Business Updates:

• Second Quarter Income Statement Review:
  • Reported a total revenue of USD18.5 million, marking a 3.8% decrease compared to the same period in 2022.
  • The enterprise software annual recurring revenue exhibited a 58% growth in the second quarter of 2023 compared to the same period in 2022.
  • Specifically in the U.S. market, the company achieved USD14.3 million in total sales, reflecting a 21% year-on-year increase driven by higher subscription revenue and increased average selling prices.
  • Total international sales decreased by 44% to USD3.3 million, primarily due to the initial orders from distributors in the previous year when the company entered new markets.
  • Product revenue for the quarter amounted to USD12.3 million, a 9% decline from Q2 2022 which was attributed to reduced volume across all segments, except in the U.S.
  • The gross profit for the second quarter reached USD10.9 million.
  • The net loss for the quarter was USD28.7 million, an improvement from the net loss of USD35.8 million in the second quarter of 2022.
  • The adjusted EBITDA showed a loss of USD17 million for the second quarter.
• Six-month period ended June 30, 2023, Income Statement Review:
  • Total revenues stood at USD33.96 million.
  • Gross profit was USD20.011 million in the six months ended June 30, 2023, as compared to USD18.91 million in the previous corresponding period.
  • Adjusted EBITDA was USD39.29 million.
• Balance Sheet Review:
  • On June 30, 2023, the company had USD364.58 million in total assets.
  • The total liabilities stood at USD86.88 million on June 30, 2023.
• Launch of Butterfly’s software development kit (SDK):
  • Butterfly launched “Butterfly Garden”, an AI marketplace for third party users.
  • Users can develop new AI tools, access a greater pool of end clients, and drive greater value for mutual customers with the company’s SDK.

Technical Observation (on the daily chart)

Presently, the stock has corrected by approximately 73.12% since reaching its highest point in the past 52 weeks, which occurred on September 12, 2022. The Relative Strength Index (RSI) over a 14-day period stands at 43.19, with expectations of further consolidation. The current price is on its 21-period SMA and below its 50-period SMA, while both can act as resistance in case of move towards on the upside.

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a recommendation of ‘WATCH’ is given on Butterfly Network Inc. (NYSE: BFLY) at the current market price of USD 1.82 as of September 12, 2023, at 6:17 am PDT. 

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

How to Read the Charts?

The yellow colour line reflects the 21-period simple moving average (SMA) while the blue line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The orange colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The red and green colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps with easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices. 

The reference date for all price data, currency, technical indicators, support, and resistance levels is September 12, 2023. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.

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