Butterfly Network Inc. (NYSE:BFLY) shares are falling Wednesday, pulling back after the stock soared Tuesday on a bullish analyst initiation.
- Butterfly Network stock is among today’s weakest performers. What’s pressuring BFLY stock?
A Quick Recap of Tuesday’s Needham Initiation
Needham analyst David Saxon started covering Butterfly on Tuesday with a Buy rating and a $10 price target, built on a sum-of-the-parts model working out to roughly 16 times the firm’s 2027 sales estimate. The analyst cited the company’s proprietary ultrasound chip technology and its Embedded licensing business, including partnerships with Midjourney worth an estimated $300 million by 2030 and Mendaera worth roughly $25 million over time, as the core reasons behind the bullish call.
The firm also pointed to Butterfly’s Garden developer program, where three new applications launching later this year could add roughly 8 percentage points to 2027 growth, along with an upgraded handheld device due in early 2027, as further upside drivers.
On the risk side, Needham flagged competition from larger, better-funded rivals such as GE Healthcare, Philips and Siemens Healthineers, along with the fact that none of Butterfly’s Embedded partnerships have launched a commercial product yet, leaving roughly two-thirds of sales tied to the company’s legacy business.
Butterfly Is Underperforming a Leading Healthcare Sector
That initiation comes against the backdrop of a stock now trading within a strong sector. Butterfly sits within Healthcare, which ranks third among 11 S&P sectors today, up 0.45%. Even so, Butterfly is underperforming that group by 6.74 percentage points, a notable gap given the sector has gained 9.61% over the past 90 days, though it has slipped 2.36% over the past month.
Today’s strongest performers are concentrated in Energy, Financials and Healthcare, while Consumer Discretionary, Utilities and Technology trail behind, a split that suggests money is moving away from higher-beta, rate-sensitive corners of the market.
BFLY Shares Are Dropping
BFLY Price Action: Butterfly shares were down 5.14% at $9.42 at the time of publication on Wednesday. The stock is approaching its 52-week high of $10.05, according to Benzinga Pro.
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