On Thursday, TD Cowen maintained a positive outlook on Butterfly Network (NYSE:BFLY), increasing the price target to $4.50 from the previous $3.00 while reaffirming a Buy rating on the stock.
The firm's analysts highlighted the sustained momentum from the global launch of the iQ3, Butterfly Network's latest product offering, as a key driver for the optimistic valuation.
"BFLY continues to make meaningful progress across its four strategic pillars, and we expect these advancements to continue in 2025 and beyond," the analysts said.
Butterfly Network has been making significant strides in its strategic initiatives, which are expected to propel the company towards continued strong double-digit revenue growth. The analysts from TD Cowen anticipates these advances to persist into 2025 and beyond, with a target for the company to reach cash flow break-even by 2027 and to achieve an annual revenue run rate of $500 million within the next five years.
The successful launches of the iQ3 in both U.S. and international markets have led to quarterly financial outperformance and upward revisions of future guidance throughout 2024. Management's refined approach to target setting has bolstered investor confidence in the attainability of analyst estimates for the company.
Butterfly Network's business momentum has been bolstered by robust demand across all sales channels. The company has also fortified its health system strategy, including the appointment of a new Chief Business Officer, positioning the enterprise franchise to potentially accelerate market share gains.
The handheld ultrasound market is expanding, and Butterfly Network is well-placed to capitalize on this growth due to the clinical and economic benefits of its technology, such as reducing hospital stays for heart failure admissions. TD Cowen's analysts expressed a strong belief that the ongoing accumulation of positive data supporting the technology's benefits will further enhance Butterfly Network's market position.
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