Critical Comparison: Tactile Systems Technology (NASDAQ:TCMD) & Butterfly Network (NYSE:BFLY)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Tactile Systems Technology	7.10%	11.49%	9.17%
Butterfly Network	-43.56%	-21.38%	-14.24%

Volatility and Risk

Tactile Systems Technology has a beta of 0.82, indicating that its stock price is 18% less volatile than the S&P 500. Comparatively, Butterfly Network has a beta of 2.04, indicating that its stock price is 104% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations for Tactile Systems Technology and Butterfly Network, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tactile Systems Technology	0	2	4	0	2.67
Butterfly Network	1	1	5	1	2.75

Tactile Systems Technology currently has a consensus price target of $37.60, suggesting a potential upside of 63.19%. Butterfly Network has a consensus price target of $8.75, suggesting a potential upside of 36.93%. Given Tactile Systems Technology’s higher probable upside, analysts clearly believe Tactile Systems Technology is more favorable than Butterfly Network.

Insider & Institutional Ownership

83.4% of Tactile Systems Technology shares are held by institutional investors. Comparatively, 37.9% of Butterfly Network shares are held by institutional investors. 2.1% of Tactile Systems Technology shares are held by company insiders. Comparatively, 22.0% of Butterfly Network shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Tactile Systems Technology 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
Tactile Systems Technology	$329.52 million	1.58	$19.09 million	$1.08	21.33
Butterfly Network	$97.61 million	17.43	-$77.06 million	($0.21)	-30.43

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

Summary

Tactile Systems Technology beats Butterfly Network on 8 of the 14 factors compared between the two stocks.

About Tactile Systems Technology

Tactile Systems Technology, Inc., a medical technology company, develops and provides medical devices to treat underserved chronic diseases in the United States. It offers Flexitouch Plus system, a pneumatic compression device for the treatment of lymphedema in the home setting; and Entre Plus System, a portable pneumatic compression device for the at-home treatment of venous disorders, such as lymphedema and chronic venous insufficiency, including venous leg ulcers. The company also provides Kylee, a mobile application to help patients learn about lymphedema, track their symptoms, and treatment, as well as to share their progress with their doctor; and AffloVest, a portable high frequency chest wall oscillation vest to treat patients with retained pulmonary secretions resulting from bronchiectasis, cystic fibrosis, and various neuromuscular disorders. Tactile Systems Technology, Inc. was incorporated in 1995 and is headquartered in Minneapolis, Minnesota.

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.