Contrasting Zepp Health (NYSE:ZEPP) and Butterfly Network (NYSE:BFLY)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Butterfly Network	-78.95%	-33.13%	-23.73%
Zepp Health	-15.48%	-15.00%	-6.07%

Analyst Recommendations

This is a summary of recent recommendations for Butterfly Network and Zepp Health, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Butterfly Network	2	1	3	0	2.17
Zepp Health	1	0	1	0	2.00

Butterfly Network currently has a consensus target price of $5.56, suggesting a potential upside of 42.45%. Zepp Health has a consensus target price of $64.37, suggesting a potential upside of 482.38%. Given Zepp Health’s higher probable upside, analysts clearly believe Zepp Health is more favorable than Butterfly Network.

Volatility & Risk

Butterfly Network has a beta of 2.27, indicating that its stock price is 127% more volatile than the S&P 500. Comparatively, Zepp Health has a beta of 1.44, indicating that its stock price is 44% more volatile than the S&P 500.

Earnings and Valuation

This table compares Butterfly Network and Zepp Health”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Butterfly Network	$97.61 million	10.19	-$77.06 million	($0.31)	-12.60
Zepp Health	$258.90 million	0.62	-$40.07 million	($2.51)	-4.40

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

Institutional and Insider Ownership

37.9% of Butterfly Network shares are held by institutional investors. Comparatively, 52.6% of Zepp Health shares are held by institutional investors. 25.2% of Butterfly Network shares are held by insiders. Comparatively, 36.0% of Zepp Health shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Zepp Health beats Butterfly Network on 9 of the 14 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 Zepp Health

Zepp Health Corporation operates as a smart wearable and health technology company worldwide. The company operates in two segments: Self-Branded Products and Others, and Xiaomi Wearable Products. It empowers users to live lives by optimizing health, fitness, and wellness journeys through its consumer brands, Amazfit, Zepp Clarity, and Zepp Aura. The company through its proprietary Zepp Digital Management Platform, which includes the Zepp OS, AI chips, biometric sensors, and data algorithms, delivers cloud-based 24/7 actionable insights and guidance to help users attain wellness goals. The company offers smart bands, watches, modules, and scales; and associated accessories, smart hearable products, sportswear, home fitness equipment, home appliances, and smart watch accessories. It also provides charts and graphs to display analysis of the activity and biometric data collected from users through its Zepp Life and Zepp mobile apps. It offers its products under the Amazfit and Zepp brand names in approximately 90 countries. The company was formerly known as Huami Corporation and changed its name to Zepp Health Corporation in February 2021. Zepp Health Corporation was founded in 2013 and is headquartered in Hefei, the People's Republic of China.