Head-To-Head Comparison: Butterfly Network (NYSE:BFLY) & Outset Medical (NASDAQ:OM)

Outset Medical (NASDAQ:OM) and Butterfly Network (NYSE:BFLY) are both small-cap medical companies, but which is the better business? We will compare the two businesses based on the strength of their risk, profitability, earnings, dividends, institutional ownership, analyst recommendations and valuation.

Profitability

This table compares Outset Medical and Butterfly Network’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Outset Medical	-73.12%	-71.37%	-30.11%
Butterfly Network	-90.31%	-37.80%	-27.13%

Analyst Ratings

This is a breakdown of recent ratings for Outset Medical and Butterfly Network, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Outset Medical	1	1	2	1	2.60
Butterfly Network	1	1	3	0	2.40

Outset Medical currently has a consensus price target of $12.67, suggesting a potential upside of 279.36%. Butterfly Network has a consensus price target of $3.00, suggesting a potential downside of 23.95%. Given Outset Medical’s stronger consensus rating and higher possible upside, research analysts plainly believe Outset Medical is more favorable than Butterfly Network.

Volatility and Risk

Outset Medical has a beta of 2.03, meaning that its share price is 103% more volatile than the S&P 500. Comparatively, Butterfly Network has a beta of 2.34, meaning that its share price is 134% more volatile than the S&P 500.

Insider and Institutional Ownership

37.9% of Butterfly Network shares are owned by institutional investors. 2.4% of Outset Medical shares are owned by company insiders. Comparatively, 25.2% of Butterfly Network shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Outset Medical and Butterfly Network”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Outset Medical	$113.69 million	0.53	-$127.98 million	($13.05)	-0.26
Butterfly Network	$82.06 million	12.14	-$72.49 million	($0.33)	-11.95

Butterfly Network has lower revenue, but higher earnings than Outset Medical. Butterfly Network is trading at a lower price-to-earnings ratio than Outset Medical, indicating that it is currently the more affordable of the two stocks.

Summary

Butterfly Network beats Outset Medical on 9 of the 15 factors compared between the two stocks.

About Outset Medical

Outset Medical, Inc., a medical technology company, engages in the development of a hemodialysis system for hemodialysis in the United States. The company offers Tablo Hemodialysis System, a compact console with integrated water purification, on-demand dialysate production, and software and connectivity capabilities for dialysis care in acute and home settings; and manufactures, supports, and distributes for Tablo console, Tablo cartridge, and other consumables. It also provides Tablo Data Ecosystem, including TabloHub, a customer-facing portal; MyTablo, a patient-facing portal; and TabloDash, an internal data analytics platform. The company was formerly known as Home Dialysis Plus, Ltd. and changed its name to Outset Medical, Inc. in January 2015. Outset Medical, Inc. was incorporated in 2003 and is headquartered in San Jose, California.

About Butterfly Network

Butterfly Network, Inc. develops, manufactures, and commercializes ultrasound imaging solutions in the United States and internationally. It offers Butterfly iQ, a handheld and single-probe whole body ultrasound system; Butterfly iQ+ and iQ3 ultrasound devices that can perform whole-body imaging in a single handheld probe integrated with the clinical workflow, and accessible on a user's smartphone, tablet, and almost any hospital computer system; and Butterfly iQ+ Vet, a handheld ultrasound system designed for veterinarians. The company also provides Butterfly system, which includes probes, and related accessories and software subscriptions to healthcare systems, physicians, and healthcare providers through a direct sales force, distributors, and eCommerce channel. In addition, it offers cloud-based software solutions to healthcare systems, teleguidance, in-app educational tutorials, and formal education programs through its Butterfly Academy software, as well as professional services for large scale deployments; and ScanLab, an education-only app provides written walkthroughs and reference imagery to guide real-time educational scanning, enhancing the learning process. Butterfly Network, Inc. was founded in 2011 and is headquartered in Burlington, Massachusetts.