An updated version of my Deep Dive into $BFLY (@ButterflyNetInc) after Q2 2021 earnings report.
Below are the highlights from my in-depth research based on my original investing framework (available in my📖 –> 10baggerdan.com/ebook).
🧵1/18
2/18
(new) $BFLY Q2 2021 (1/2)
– Revenue $16.5 (40% YoY growth)
– Product revenue $13M (30.3% YoY growth) and Subscription revenue $3.5M (94.3% YoY growth)
– Gross profit $8.2M ($0.2M in Q2 '20)
– Gross margin 49.8% (1.4% in Q2 '20)
– Net loss $2.9M (loss $23.2M in Q1 '20)
3/18
(new) $BFLY Q2 2021 (2/2)
– Cash ($509.5M)
– R&D expenses grew >50%
– EPS is -$0.02 (beats by $0.22)
No change to prior guidance for 2021.
4/18
$BFLY Investment Thesis (1/4)
2/3 of the world has no access to medical imaging (MRI and ultrasound).
Access to medical imaging is vital (2/3 of diagnostic dilemmas can be addressed through simple imaging).
5/18
$BFLY Investment Thesis (2/4)
Traditional medical imaging devices are expensive (from $10k – $100k), bulky (cart-based), and must be operated by specially trained professionals.
Access to them is limited even in the developed countries (especially in 3rd world countries).
6/18
$BFLY Investment Thesis (3/4)
Company offers a groundbreaking ultrasound solution: hand-held portable ultrasound device + cloud platform to capture, store and share images.
The price of the device is 10x less than the cheapest traditional medical imaging device.
7/18
$BFLY Investment Thesis (4/4)
The company eventually wants to replace every stethoscope in the world with their portable ultrasound device.
8/18
$BFLY Company Background
– Industry medical device, telemedicine
– Founded in 2011 by @JMRothberg
– Not a founder led company anymore, but founder has a significant control
– IPO'd in 2021
– Raised >$600M
– Market cap >$2B
– No debt
– Unprofitabl
– Growing at >65%+ CAGR
9/18
$BFLY Technology (1/5)
Combination of software and hardware.
Hardware is powered by a proprietary Ultrasound-on-Chip™ technology.
It is the only ultrasound device that can perform "whole-body imaging" in a single hand-held probe using semiconductor technology.
10/18
$BFLY Technology (2/5)
The device is empowered by AI.
(new) Today announced a strategic partnership with @CaptionHealth to further improve AI capabilities.
Butterfly also develops a solution for Veterinary.
The device costs the same and can scan animals ranging from companion animals (dogs and cats) to large animals (horses) to exotic animals (from sea turtles to tigers).
13/18
$BFLY Technology (5/5)
The company has an FDA clearance, CE mark, and other necessary approvals in other countries.
The product is already available in 20 countries (USA, Canada, Australia, New Zealand, throughout greater Europe, and in parts of Latin America).
14/18
$BFLY TAM (1/2)
Global ultrasound market – $8B (2020).
It continues to grow double-digit mainly as a result of expanding access to new settings (beyond traditional ones like hospitals, imaging centers, doctor offices).
15/18
$BFLY TAM (2/2)
At the same time, hand-held devices currently account only for 3% (‼️) of the total global ultrasound market.
There are 40M+ global healthcare practitioners. Company estimates that they can target at least 8M (‼️) practitioners worldwide.
16/18
$BFLY MOAT (1/2)
Ultrasound-on-Chip™ technology significantly reduces the cost of manufacturing (2x cheaper than the closest competitor – Vscan from $GE).
The company has an exclusive deal with $TSM to produce semiconductor chips.
17/18
$BFLY MOAT (2/2)
280 patents already granted and 540 (!!!) patents awaiting.
Creating high switching costs (the more customers upload scans to the Butterfly's cloud platform, the stickier they become to the product).
18/18
The rest of the $BFLY highlights cover the following points:
– Business Model
– Team
– Ownership
– Financials
– Valuation + Price Target
– Risks
– Bonus: Optionality
After a recent blowout of $ATER (though I still haven't sold a single share), I have slightly reevaluated my approach to investing in small, emerging companies.
🧵1/7
2/7
As the first measure, I made a few adjustments in my investing framework (documented in my upcoming eBook) to make it more rigorous.
My investing framework consists of a number of key components I always look at in every company when I do in-depth research on them.
3/7
Key components of my investing framework:
1. Company Background 2. Technology 3. Total Addressable Market 4. MOAT 5. Business Model 6. Team 7. Ownership 8. Financials 9. Valuation 10. Risks 11. Optionality
Today $FUBO, one of my potential #multibaggers, publishes its Q2 earnings.
Some expectations and thoughts below👇🏻
🧵1/6
2/6
$FUBO has previously raised its guidance for both Q2 and the full year.
I want to see if it continues (especially after the hot summer with the Olympics), and they will raise the guidance for Q3 and the full year, respectively.
3/6
Next, apart from the obvious (increase in MAU subscriptions), I am curious to see $FUBO 's numbers in advertising part of their business.
I assume that closer to the end of Q2, fuboTV must have attracted more advertisers in anticipation of the Olympics.
I want to introduce a long-term play on my list of potential #Multibaggers that is just getting started, $SENS (@senseonics)
A medical technology company that disrupts the CGM system market for diabetics
Below is an intro from my in-depth research based on my original framework
$SENS Investment Thesis (1/7)
– Diabetes is one of the most common diseases (~500 million people worldwide have one of the types of diabetes)
– Unfortunately, the number of people with diabetes is continuously growing (9.3% of the global population in 2019 to 11% by 2045)
$SENS Investment Thesis (2/7)
– Diabetics are required to monitor their blood glucose levels constantly, and traditionally it is done by finger pricking
– Many companies tried to solve this problem in a different, more convenient way
News:
– Skillz held its Annual Meeting of Stockholders on May 26 and elected seven directors for a term of one year, including Jerry Bruckheimer and Harry Sloan.
– No new games released