Reviewing iRhythm Technologies (NASDAQ:IRTC) and Butterfly Network (NYSE:BFLY)

iRhythm Technologies (NASDAQ:IRTC) and Butterfly Network (NYSE:BFLY) are both medical companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, dividends, earnings, risk and institutional ownership.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
iRhythm Technologies	$591.84 million	9.23	-$113.29 million	($2.93)	-58.01
Butterfly Network	$82.06 million	4.95	-$72.49 million	($0.28)	-5.77

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
iRhythm Technologies	-14.06%	-90.03%	-8.52%
Butterfly Network	-71.79%	-30.53%	-21.80%

Institutional and Insider Ownership

37.9% of Butterfly Network shares are owned by institutional investors. 0.7% of iRhythm Technologies 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 large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk & Volatility

iRhythm Technologies has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500. Comparatively, Butterfly Network has a beta of 2.52, meaning that its stock price is 152% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for iRhythm Technologies and Butterfly Network, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
iRhythm Technologies	0	1	10	1	3.00
Butterfly Network	0	1	3	0	2.75

iRhythm Technologies presently has a consensus price target of $163.82, indicating a potential downside of 3.63%. Butterfly Network has a consensus price target of $3.00, indicating a potential upside of 85.76%. Given Butterfly Network’s higher probable upside, analysts plainly believe Butterfly Network is more favorable than iRhythm Technologies.

Summary

Butterfly Network beats iRhythm Technologies on 8 of the 15 factors compared between the two stocks.

About iRhythm Technologies

iRhythm Technologies, Inc., a digital healthcare company, engages in the design, development, and commercialization of device-based technology to provide ambulatory cardiac monitoring services to diagnose arrhythmias in the United States. It offers Zio services, an ambulatory monitoring solution, including long-term and short-term continuous monitoring and mobile cardiac telemetry monitoring services. The company also provides the Zio Monitor System, a prescription-only, remote electrocardiogram (ECG) monitoring system that consists of a patch ECG monitor that records the electric signal from the heart continuously for up to 14 days and the Zio ECG Utilization Software System, which supports the capture and analysis of ECG data recorded by the Zio Monitor patch at the end of the wear period, including specific arrhythmia events detected by the ZEUS System; the Zio XT System is the previous generation of the Zio Monitor System and is a prescription-only, remote ECG monitoring system that consists of the Zio XT patch that records the electric signal from the heart continuously for up to 14 days; and the Zio AT system, a prescription-only, remote ECG monitoring system that similarly consists of the Zio AT patch that records the electric signal from the heart continuously for up to 14 days and the ZEUS System, but which also incorporates the Zio AT wireless gateway that provides connectivity between the Zio AT patch and the ZEUS System during the patient wear period. It has a development collaboration agreement with Verily Life Sciences LLC and Verity Ireland Limited to develop various next-generation atrial fibrillation screening, detection, or monitoring products. The company was incorporated in 2006 and is headquartered in San Francisco, 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.