Value
1.8/10data confidence 33%| Component | Sub-score |
|---|---|
| P/S | 0.0 |
| Analyst target | 3.0 |
- ▸Expensive valuation
BFLY · Why this verdict
Why Butterfly Network (BFLY) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score4.5/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company has beaten earnings estimates in all of the last 4 quarters, with an average surprise of 39.6%, and the engine flags an upcoming earnings catalyst. Catalyst breakdown | The beat streak should extend to at least 3 of the next 4 quarters over the next 12 months. | →Stable |
| CounterA high average surprise driven off small-loss EPS bases can produce outsized percentage beats without a durable improvement in the underlying business. | ||
The stock is in a technical breakout, forming a golden cross and trading above all major moving averages with an RSI of 62 and a bullish MACD. Chart pattern detection | Price should sustain trading above its 200-day moving average and the breakout should hold over the next 12 months. | →Stable |
| CounterOn-balance volume is actually falling in a distribution pattern, suggesting the breakout may lack the underlying volume conviction needed to sustain. | ||
The stock already screens as expensively valued with a value score of just 1.8, and the analyst target has effectively already been reached, per the -21.8% upside warning. Bear case | The value score should climb above 4.0 or the upside estimate should turn positive over the next 12 months if valuation resets favorably. | →Stable |
| CounterStrong growth of 25% YoY and a perfect beat streak could justify a valuation premium that a static value score doesn't fully capture. | ||
The engine's asymmetry ratio sits at -1.46, having failed the gate, with modeled downside outweighing the baseline upside estimate. Engine gate (failed) | The asymmetry ratio should turn positive and exceed 1.0 over the next 12 months for the risk/reward setup to improve. | →Stable |
| CounterThe breakout-driven price target of $9.50 implies 23.7% upside from the technical target calculation, suggesting the negative asymmetry figure may be overly conservative relative to the setup. | ||
Insiders have been net sellers, offloading $4,194,133 (0.209% of market cap) over the past 90 days with 6 sell transactions and no offsetting buys, generating a bearish insider signal. Insider transaction read | Insider activity should shift toward net buying or the bearish signal should moderate over the next 12 months. | →Stable |
| CounterThe selling is classified as only minor in severity relative to market cap and could reflect routine diversification rather than a negative view of company prospects. | ||
The company has beaten earnings estimates in all of the last 4 quarters, with an average surprise of 39.6%, and the engine flags an upcoming earnings catalyst.
→StableCatalyst breakdown
- Expectation
- The beat streak should extend to at least 3 of the next 4 quarters over the next 12 months.
CounterA high average surprise driven off small-loss EPS bases can produce outsized percentage beats without a durable improvement in the underlying business.
The stock is in a technical breakout, forming a golden cross and trading above all major moving averages with an RSI of 62 and a bullish MACD.
→StableChart pattern detection
- Expectation
- Price should sustain trading above its 200-day moving average and the breakout should hold over the next 12 months.
CounterOn-balance volume is actually falling in a distribution pattern, suggesting the breakout may lack the underlying volume conviction needed to sustain.
The stock already screens as expensively valued with a value score of just 1.8, and the analyst target has effectively already been reached, per the -21.8% upside warning.
→StableBear case
- Expectation
- The value score should climb above 4.0 or the upside estimate should turn positive over the next 12 months if valuation resets favorably.
CounterStrong growth of 25% YoY and a perfect beat streak could justify a valuation premium that a static value score doesn't fully capture.
The engine's asymmetry ratio sits at -1.46, having failed the gate, with modeled downside outweighing the baseline upside estimate.
→StableEngine gate (failed)
- Expectation
- The asymmetry ratio should turn positive and exceed 1.0 over the next 12 months for the risk/reward setup to improve.
CounterThe breakout-driven price target of $9.50 implies 23.7% upside from the technical target calculation, suggesting the negative asymmetry figure may be overly conservative relative to the setup.
Insiders have been net sellers, offloading $4,194,133 (0.209% of market cap) over the past 90 days with 6 sell transactions and no offsetting buys, generating a bearish insider signal.
→StableInsider transaction read
- Expectation
- Insider activity should shift toward net buying or the bearish signal should moderate over the next 12 months.
CounterThe selling is classified as only minor in severity relative to market cap and could reflect routine diversification rather than a negative view of company prospects.
TrendMatrix Research · core thesis
Engine thesis — one sentence
BFLY combines a perfect earnings beat streak and a technical breakout with an expensive valuation and a negative modeled risk/reward, while insiders have recently been net sellers.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.0 |
| Gross margin | 9.2 |
| Op margin | 0.0 |
| Net margin | 0.0 |
| Current ratio | 9.0 |
| FCF quality | 4.7 |
| Moat | 7.2 |
| Rule of 40 | 5.5 |
| Piotroski F | 6.7 |
- ▸FCF-positive despite GAAP loss (FCF margin 9%, FCF yield 0.4%)
Growth
8.7/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 8.7 |
- ▸Strong growth: 25% YoY
Momentum
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 8.2 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 1.5 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.2 |
| Analyst rating | 5.0 |
| Price target | 2.4 |
- ▸Below analyst target
Insider
3.4/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 5.1 |
- ▸Notable insider selling — $4,194,133 (0.209% of mkt cap)
Peer rank
2.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 0.2 |
| quality rank | 0.7 |
| growth rank | 7.4 |
Technical
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.0 |
| support resistance | 1.7 |
| 52w position | 8.1 |
| gap | 5.0 |
Risk (lower is worse)
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 3.7 |
| days to cover | 5.1 |
| volatility | 0.0 |
| put call | 6.7 |
| implied vol | 0.0 |
| max pain risk | 3.0 |
| beta | 3.2 |
| debt equity | 9.6 |
- ▸High IV: 130%
- ▸Above max pain $2
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position. | News modifier +2 (SELL_IF_HOLDING → HOLD_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_SELL|L3:NEWS_MOD=+2Passed (6)
- MOMENTUM:4.9>=4.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:25d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-2.1=NEGATIVE
Warning (2)
- MOMENTUM:4.9<5.5 (soft — BUY_NOW allowed but watch)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-2.11
Upside
-31.7%
Downside
15.0%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 68, MACD bullish
EdgeCatalyst-Driven — Earnings in 25d with 4/4 beat streak
SuitabilityAggressive — Beta 2.05>1.3, MCap $2.0B<$5B
Investment implication
The F-path SELL output reflects an overall score of 4.5 below the 5.4 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Growth at 8.7) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-2.1=NEGATIVE) reinforce the read. Current asymmetry R:R is -2.11 — supplementary context, not the trigger for this path.
The strongest dimensions are Growth at 8.7, Catalyst at 7.6, and Momentum at 4.9; the weakest are Value at 1.8, Peer rank at 2.1, and Insider at 3.4. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of -2.11 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Earnings Beat Streak
Trip ifEarnings beat rate falls below 2 of the next 4 quarters, breaking the current 4-quarter streak.
- P2Technical Breakout Setup
Trip ifRSI falls below 40 from the current 62, reversing the current breakout setup.
- P3Expensive Valuation Limited Upside
Trip ifValue score rises above 5.0 from the current 1.8.
- P4Negative Asymmetry Risk Reward
Trip ifAsymmetry ratio rises above 1.0 from the current -1.46.
- P5Notable Insider Selling
Trip ifNet insider buying exceeds $500,000 over a 90-day period, reversing the current net selling of $4,194,133.