Shares of Butterfly Network Inc (NYSE: BFLY) fell 5.48% in after-hours trading on Friday, despite the company reporting better-than-expected third-quarter revenue. The digital health firm, known for its portable ultrasound technology, posted mixed results that left investors concerned about its profitability.
Butterfly Network reported Q3 revenue of $21.5 million, representing a 5% year-over-year growth and surpassing analyst estimates of $21.22 million. However, the company's net loss widened to $34 million, compared to $16.9 million in the same quarter last year. This significant increase in losses likely contributed to the stock's decline.
While Butterfly Network highlighted positive developments, including a record low quarterly cash burn of $3.9 million and reaffirmed full-year revenue guidance of $91-95 million, investors appeared to focus on the company's ongoing profitability challenges. The adjusted EBITDA loss for Q3 was $8.1 million, and the company narrowed its full-year adjusted EBITDA loss guidance to $32-35 million.
Despite the after-hours drop, Wall Street remains cautiously optimistic about Butterfly Network's prospects. The current average analyst rating on the shares is "buy," with a median 12-month price target of $3.50, representing a 41.7% upside from the stock's previous closing price. However, the market's reaction suggests that investors are looking for more concrete signs of a path to profitability before fully embracing the company's growth story.
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