Comparing IRIDEX (NASDAQ:IRIX) and Butterfly Network (NYSE:BFLY)

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

Volatility & Risk

Butterfly Network has a beta of 2.08, meaning that its stock price is 108% more volatile than the S&P 500. Comparatively, IRIDEX has a beta of 0.62, meaning that its stock price is 38% less volatile than the S&P 500.

Insider & Institutional Ownership

37.9% of Butterfly Network shares are held by institutional investors. Comparatively, 20.1% of IRIDEX shares are held by institutional investors. 22.0% of Butterfly Network shares are held by company insiders. Comparatively, 8.6% of IRIDEX shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Butterfly Network and IRIDEX”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Butterfly Network	$97.61 million	20.18	-$77.06 million	($0.29)	-25.50
IRIDEX	$52.67 million	0.21	-$4.44 million	($0.20)	-3.20

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Butterfly Network	-66.74%	-33.99%	-22.96%
IRIDEX	-6.88%	N/A	-12.55%

Analyst Ratings

This is a summary of current ratings and price targets for Butterfly Network and IRIDEX, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Butterfly Network	1	1	3	0	2.40
IRIDEX	1	0	1	0	2.00

Butterfly Network currently has a consensus target price of $6.56, suggesting a potential downside of 11.27%. IRIDEX has a consensus target price of $3.00, suggesting a potential upside of 368.75%. Given IRIDEX’s higher possible upside, analysts plainly believe IRIDEX is more favorable than Butterfly Network.

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 IRIDEX

IRIDEX Corporation, an ophthalmic medical technology company, provides therapeutic based laser systems, delivery devices, and consumable instrumentation to treat sight-threatening eye diseases in ophthalmology. It offers laser consoles, such as Cyclo G6 laser system for use in the treatment of glaucoma; IQ 532 and IQ 577 laser systems, which are used for the treatment of retinal disorders; and OcuLight TX, OcuLight SL, OcuLight SLx, OcuLight GL, and OcuLight GLx laser photocoagulation systems that are used to treat proliferative diabetic retinopathy, macular holes, retinal tears, and detachments. The company also provides delivery devices, including TxCell scanning laser delivery system that allows the physician to perform multi-spot pattern scanning; slit lamp adapter, which allows the physician to utilize a standard slit lamp in diagnosis and treatment procedures; and laser indirect ophthalmoscope for use in procedures to treat peripheral retinal disorders. It offers MicroPulse P3 Probe, which is used with its Cylco G6 laser system to perform MicroPulse transscleral laser therapy; G-Probe, which is used in procedures to treat uncontrolled glaucoma; G-Probe and G-Probe Illuminate, which are used in procedures to treat refractory glaucoma; and EndoProbe family of products for use in vitrectomy procedures. The company serves ophthalmologists, research and teaching hospitals, government installations, surgical centers, hospitals, veterinary practices, and office clinics. It markets its products through direct and independent sales force in the United States, as well as through independent distributors internationally. The company was formerly known as IRIS Medical Instruments, Inc. and changed its name to IRIDEX Corporation in November 1995. IRIDEX Corporation was incorporated in 1989 and is headquartered in Mountain View, California.