BFLY · Butterfly Network, Inc. · Stock research

Current Thesis

The leg being bought has not changed since June: Butterfly re-rating from a handheld-ultrasound vendor into a licensor of its Ultrasound-on-Chip, with Q2 2026 Butterfly Embedded revenue of $10.8M (+439% YoY, reported 2026-07-30) standing as the evidence that licensing can produce eight-figure quarterly revenue. What has advanced since the last update is the tape and the documentation of supply.

Closes in sequence: $7.10 on 07-29 (pre-print), $8.17 on 07-30 (+15.07%) on the beat-and-raise, $7.11 on 07-31 (-12.97%, a full round trip from an open that was the session high of $8.04), $8.22 on 08-03 (+15.61%) on 12,854,087 shares, and $8.81 on 08-04 (+7.18%) on 10,426,860 shares against a session range of $8.07–$9.00. Three consecutive higher closes, with no company press release issued between the 07-30 results and 08-05. The 08-04 high is the best print since the 06-29 intraday $9.69.

The supply behind that volume has moved from notice to execution. A Form 4 reported 2026-08-04 shows the Glenview and Longview funds advised by director Larry Robbins sold the full 1,876,292 Class A shares noticed on the 07-31 Form 144 — 1,720,129 on 07-31 at a $7.3925 weighted average (range $7.2282–$7.82) and 156,163 on 08-03 at $8.1048, roughly $13.98M in aggregate.

At $8.81 the stock trades above the five-analyst average target of $8.06 and the $8.00 median. Only Craig-Hallum's $10.00 (raised from $5.50 on 07-31) and the $11.00 high target sit above the last price. The 50-day moving average was $6.68 and the 200-day $4.42 as of 2026-08-05.

Life-cycle: MATURING, dated 2026-08-04. The label describes the narrative's supply of new information; the tape is doing something louder. Butterfly's last genuinely new narrative input was the 07-30 quarter, and before that the Aleph Neuro brain-imaging agreement of 06-25. Nothing has been disclosed since, and the marginal buyer across 08-03 and 08-04 was absorbing filed insider supply. ACCELERATING would require a fresh disclosure — a newly named Embedded licensee with contract economics attached. SATURATED becomes the read if the advance stalls below the 06-29 high of $9.69 and rolls back through the $8.06 consensus level on declining volume.

Bullish and bearish views on Butterfly Network, Inc.

The model's bull view on Butterfly Network, Inc. (BFLY), in brief: Q2 2026 (2026-07-30): revenue $32.612M, +39% YoY, above the $29.36M consensus and above the guided high end; adjusted EPS $(0.01) against $(0.06) expected. The bear view: Core POCUS revenue rose 2% YoY to $21.9M while probe units rose 23% and average selling price fell 12%, attributed on the 07-30 call to iQ+ mix and pricing concessions including a VCOM medical-school agreement with total contract value above $10M. Both cases follow in full.

Bull Case

• Q2 2026 (2026-07-30): revenue $32.612M, +39% YoY, above the $29.36M consensus and above the guided high end; adjusted EPS $(0.01) against $(0.06) expected.
• Butterfly Embedded revenue $10.8M, +439% YoY, on Midjourney development work and contract milestones. Software and services revenue of $16.9M exceeded product revenue of $15.7M — the mix crossed over inside a single quarter.
• Record gross profit $23.3M, +56% YoY; gross margin 71.4% against 63.7% a year earlier; adjusted EBITDA loss $1.4M against $6.2M in Q2 2025.
• FY2026 revenue guidance raised to $119–123M from $117–121M against a $118.68M consensus; FY adjusted EBITDA loss guided $19–23M.
• Embedded roster stated at 11 partners on the 07-30 call, two added in Q2 (a neurotechnology developer and a women's-health wearable), following the up-to-$74M/5-year Midjourney structure filed on Form 8-K 2025-11-17 and the Aleph Neuro agreement of 2026-06-25.
• Core POCUS probe units +23% YoY; stated presence in 80% of U.S. medical schools with four new institutional partnerships added in Q2; Compass AI pipeline up fivefold YoY with six new enterprise deals signed (07-30 call).
• Regulatory authorization received in Brazil, with iQ+ and iQ3 commercial sales beginning through distributors (stated 2026-07-30).
• Dated product steps from the call: P5.1 probe with harmonic imaging in Q1 2027, iQ Station cart in late 2027, Midjourney Apollo chip delivery "late 2027 or early 2028".
• Craig-Hallum (Chase Knickerbocker) raised its target to $10.00 from $5.50 with a Buy on 2026-07-31; William Blair maintained Buy the same day.

Bear Case

• Core POCUS revenue rose 2% YoY to $21.9M while probe units rose 23% and average selling price fell 12%, attributed on the 07-30 call to iQ+ mix and pricing concessions including a VCOM medical-school agreement with total contract value above $10M. Units are being bought with price.
• Embedded's $10.8M is development and milestone revenue, not a recurring licence stream. Q3 revenue is guided to $26–30M against Q2's $32.612M actual and Q3 adjusted EBITDA loss to $6–9M against Q2's $1.4M; management's own numbers step the quarter back down.
• Insider distribution is documented at scale across two of the largest holders: 4,013,452 shares from Rothberg 07-14 to 07-16 plus 660,000 Class B on 07-22, and 1,876,292 from the Glenview/Longview funds on 07-31 and 08-03. No offsetting open-market insider purchase has been filed.
• Cash and equivalents were $124.7M at 06-30 against $150.5M at 2025-12-31, with FY adjusted EBITDA loss still guided at $19–23M.
• The 08-04 close of $8.81 is above the five-analyst average target ($8.06) and the $8.00 median. The covering sell-side sits below the market.
• Midjourney Medical's whole-body scanner is pre-FDA with no established reimbursement pathway, and the Apollo chips are not due until late 2027 or early 2028. The annual licence and milestone economics hang on a private company's regulatory outcome.
• Short interest at the 2026-07-15 settlement — still the most recent published — If the 08-03 and 08-04 sessions were substantially covering, the bid they produced has no successor.

Setup & Price Structure

The post-print shelf runs $7.05–$7.17: closes of $7.07 (07-27), $7.17 (07-28) and $7.10 (07-29), with the 07-31 reversal bottoming at $7.05. Everything above is priced off that base. Overhead sits at the 07-30 earnings-day high of $8.39 (cleared on 08-04), the $9.00 rejection on 08-04, and the 06-29 intraday $9.69 that remains the 52-week high. Below the base, the nearest visible support is the $5.70 shelf that preceded the late-June Midjourney gap.

The two heaviest sessions of the window came after the print.

Crowding and positioning observables, stated as observed:

• Disseminated 2026-07-24. The 07-31 settlement has not yet been published.
• Distance above trend is wide: $8.81 against a $6.68 50-day and a $4.42 200-day moving average (2026-08-05).
• Filed insider dispositions in the last four weeks: Rothberg (07-14 to 07-16, 07-22), Glenview/Longview (07-31, 08-03). Zero filed purchases.
• Beta 2.05 on a five-year basis; market capitalisation $2.35B on 266.29M shares outstanding, float 203.13M, institutional ownership 44.95%.
• No earnings date falls inside the next 30 days. Q3 results land in late October, so nothing in the near window forces positions to resolve against a print.

Catalyst Calendar (next 30 days)

• ~2026-08-11 (est.) — FINRA publication of the 2026-07-31 short-interest settlement. Covers both earnings sessions and the 07-31 reversal.
• 2026-08-14 — Q2 2026 institutional 13F filing deadline. Positions struck as of 06-30, three sessions after the 06-29 high of $9.69.
• ~2026-08-26 (est.) — FINRA publication of the 2026-08-14 settlement. First short-interest data covering the 08-03 and 08-04 sessions.

Dated events beyond the 30-day window: ~2026-09-30 (est.) FedRAMP full certification, stated on the 07-30 call as expected in Q3 2026; 2026-10-01 first state commercial implementation of Home & Community Care, with revenue expected in Q4; ~2026-10-29 (est.) Q3 2026 results.

What Would Change Our Mind

The $7.05–$7.17 shelf built between 07-27 and 07-31 is the structure the entire post-print advance is measured from; losing it returns the name to its pre-Midjourney range. Concretely, a weekly close below $7.00 breaks that shelf and the late-June breakout base together, and opens the gap toward $5.70.

On the disclosure side, three specific outcomes would flip the read:

• that would date the advance as covering.
• The 2026-08-14 13F round showing net institutional selling across Q2, which removes the argument that institutions accumulated the June Midjourney move.
• A Q3 print at or below the $26M low end of guidance, or any cut to the $119–123M FY range, which would break the claim that Embedded licensing scales.

In the other direction, a third Embedded licensee named with disclosed contract economics would restore new information to the narrative and argue for ACCELERATING.

Correlation Notes

• Midjourney is private. No listed instrument prices the scanner programme, so the correlation runs entirely through headlines; any Midjourney regulatory, funding or timeline news moves BFLY with no hedge available.
• Beta 2.05 on a $2.35B market capitalisation with a 203.13M float: session-to-session behaviour tracks small-cap risk appetite more closely than ultrasound-industry news.
• 15.73% of float short at the 07-15 settlement places BFLY in the high-short-interest small-cap cohort, which moves together on days that have nothing to do with the company.
• GE HealthCare, Philips and Siemens Healthineers compete in Core POCUS, but their results say little about Embedded licensing, which none of them report. The Q2 upside came from the segment with no listed comparable.
• Institutional ownership stands at 44.95%; the 08-14 13F round is the mechanism by which that figure is refreshed, and it is struck as of 06-30.