Analyzing Butterfly Network (NYSE:BFLY) and Schrodinger (NASDAQ:SDGR)

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

Valuation and Earnings

This table compares Butterfly Network and Schrodinger”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Butterfly Network	$97.61 million	14.07	-$77.06 million	($0.30)	-17.98
Schrodinger	$255.87 million	3.57	-$103.26 million	($1.42)	-8.73

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

Institutional and Insider Ownership

37.9% of Butterfly Network shares are owned by institutional investors. Comparatively, 79.1% of Schrodinger shares are owned by institutional investors. 25.2% of Butterfly Network shares are owned by company insiders. Comparatively, 21.0% of Schrodinger shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

Butterfly Network has a beta of 2.28, meaning that its share price is 128% more volatile than the S&P 500. Comparatively, Schrodinger has a beta of 1.58, meaning that its share price is 58% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations for Butterfly Network and Schrodinger, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Butterfly Network	1	2	3	0	2.33
Schrodinger	1	4	4	0	2.33

Butterfly Network presently has a consensus target price of $5.56, suggesting a potential upside of 3.10%. Schrodinger has a consensus target price of $20.50, suggesting a potential upside of 65.46%. Given Schrodinger’s higher possible upside, analysts clearly believe Schrodinger is more favorable than Butterfly Network.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Butterfly Network	-73.63%	-33.61%	-23.63%
Schrodinger	-40.37%	-29.47%	-14.69%

Summary

Schrodinger beats Butterfly Network on 8 of the 13 factors compared between the two stocks.

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.

About Schrodinger

Schrödinger, Inc., together with its subsidiaries, develops physics-based computational platform that enables discovery of novel molecules for drug development and materials applications. The company operates in two segments, Software and Drug Discovery. The Software segment is focused on licensing its software to transform molecular discovery for life sciences and materials science industries. The Drug Discovery segment focuses on building a portfolio of preclinical and clinical programs, internally and through collaborations. The company serves biopharmaceutical and industrial companies, academic institutions, and government laboratories worldwide. Schrödinger, Inc. was incorporated in 1990 and is based in New York, New York.