Shares of Butterfly Network (BFLY) closed 26.9% higher on Sept. 4 after the company announced the commercial launch of its third-generation handheld point-of-care ultrasound system, Butterfly iQ3, in Europe. Investors are likely upbeat about the news due to the strong uptake of Butterfly iQ3 in the U.S. market following its February launch.
Butterfly iQ3 received EU MDR certification in March and is fully compliant with the Restriction of Hazardous Substances Directive. The device will currently be available in all European countries and the United Kingdom. It was launched in Canada during the second quarter. The company is now applying for regulatory approval for iQ3 in additional regions.
The Butterfly iQ3 is the company’s most advanced portable ultrasound device in its portfolio which includes the second-generation iQ+ device. The Butterfly iQ3 uses BFLY’s most advanced P4.3 chip that has double the processing power compared to iQ+ for best-in-class image quality, new advanced 3D imaging tools for easier use and a smaller, more ergonomic design. Moreover, the higher selling price of the device compared to iQ+ should accelerate the revenue growth rate.
BFLY’s shares have gained 39.9% so far this year, significantly outperforming the industry’s decline of 13.5% on the back of the rising adoption of Butterfly iQ3 in the U.S. market. The S&P 500 Index has gained 15.9% in the same period.
Image Source: Zacks Investment Research
U.S. Acclaim for BFLY’s iQ3
Butterfly Network’s 16% top-line growth in the second quarter was primarily driven by robust uptake of Butterfly iQ3 in the United States and additional sales from launch in Canada. Of the company’s total online orders, 74% were for iQ3 during the quarter. iQ3 represented 89% of sales across all channels in Canada. Moreover, the company initiated a competitive device upgrade in the second quarter, allowing customers to turn their old non-butterfly product into a new iQ3. This represents an additional growth opportunity for the company as it upgraded over a thousand probes in the second quarter.
During the second quarter, iQ3 sales represented 50% of total unit sales, with 75% of total units sold in the United States.
Enhanced Patient Care with BFLY’s iQ3
The company’s new advanced 3D capabilities, iQ Slice and iQ Fan for Butterfly iQ3, make image capturing easier. iQ Slice helps to capture up to 46 ultrasound slices at a time across a wide angle. The imaging mode is designed to make it easier and faster to acquire excellent images without skilled maneuvering. On the other hand, iQ Fan is a dedicated lung tool that reduces the movements necessary to capture information and make informed clinical decisions.
These two new features come with Butterfly’s existing robust feature list of more than 20 anatomical presets, six imaging modes, and a collection of artificial intelligence, advanced imaging tools, and a rich set of Calculation tools.
Apart from its rich features, Butterfly iQ3’s smaller and ergonomic design is fueling its strong adoption in the United States and Canada, likely to continue in European markets. The device has a 17% smaller probe face and is 7% shorter in size than iQ+. The new device also comes with a stronger battery with up to 2 hours of thermal run time for outstanding continuous scanning and charges 2.5 times faster.
These features are helping the Butterfly iQ3 device enhance echo image quality significantly and the biplane mode for cannulation, which has proven beneficial in managing patients with challenging IV access.
Butterfly Network, Inc. Price
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Strategic Positioning and Financial Outlook
Butterfly Network currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader medical space are Boston Scientific (BSX), Apyx Medical (APYX), and Universal Health Services (UHS), all carrying a Zacks Rank #2 at present.
Boston Scientific has a long-term estimated growth rate of 12.6%. BSX’s earnings surpassed estimates in each of the trailing four quarters, with an average surprise of 7.2%. Boston Scientific’s shares have risen 41.4% year to date, outpacing industry growth.
Apyx Medical has an estimated growth rate of 20% for 2025. Its earnings missed estimates in each of the trailing four quarters, with a negative average surprise of 25.98%. Apyx Medical’s shares have faced challenges this year compared to industry trends.
Universal Health Services has a long-term estimated growth rate of 19%. UHS’ earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 14.58%. Universal Health Services’ shares have shown strong performance this year, surpassing industry averages.
