TEM vs. BFLY: Which Stock Offers Greater Upside Amid Health Tech Boom?

Per Cornell Jeb E. Brooks School of Public Policy report, the healthcare landscape is constantly evolving, shaped by advances in technology, shifts in policy and rising patient expectations. This year is proving to be a pivotal moment for innovation and transformation in the industry with innovations such as precision medicine, AI integration and enhanced cybersecurity measures driving both opportunities and disruptions. These key trends reflect a growing emphasis on personalized care, operational efficiency and system-wide resilience. 

Tempus AI TEM and Butterfly Network BFLY are two key players with significant presence in this sector. Given the positive trend, both companies ended third-quarter 2025 with year-over-year top-line growth, surpassing our estimates. 

Price Performance Comparison

In the past year, shares of Tempus have surged 10% while those of Butterfly Network declined 19.3%. 

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The Case for Tempus 

For the first time, Tempus reported positive adjusted EBITDA of $1.5 million in the third quarter — a landmark achievement after a decade of effort. The growth was driven by a combination of robust top-line performance across major business segments and disciplined operational execution. 

The Genomics business delivered strong momentum, with total volumes rising 33% year over year. This included 27% growth in Oncology testing and a 37% rise in Hereditary testing, reflecting broad-based strength across essentially all assays offered. After earlier disruptions caused by restructuring the team when introducing the MRD portfolio, the company spent multiple quarters retraining and stabilizing the sales force. During the third-quarter earnings call, management stated that the team has finally become efficient and fully trained, enabling stronger execution. 

Alongside Genomics, its Data Licensing (Insights) business grew 38% during the quarter and secured an impressive $150 million in new total contract value across multiple significant agreements. 

Tempus also highlighted ongoing cost discipline and efficiency efforts that helped expand margins. Notably, the company delivered positive adjusted EBITDA even after absorbing several million dollars in incremental expenses related to the Paige acquisition, which was completed mid-quarter. The company stated that without this acquisition-related drag, adjusted EBITDA would have approached $4 million. 

The Case for Butterfly Network

Even in a seasonally softer period, Butterfly Network delivered year-over-year growth while continuing to reduce cash usage. At the same time, disciplined cost control contributed to further reductions in cash burn, reflecting operational progress alongside revenue expansion. U.S. revenues grew slightly to $16.1 million, supported by stronger e-commerce activity and improved veterinary channel performance. 

International revenues amounted to $5.4 million, up 4% year over year, driven mainly by higher pricing following the iQ3 launch, with demand continuing to shift toward broader global adoption of the iQ3 platform.

Disciplined cost control contributed to reductions in cash burn, reinforcing the company’s focus on operating efficiency while scaling revenues. Management reported a normalized cash burn of $3.9 million, reflecting improvement compared with previous periods as spending tightened across the business. This reduction was supported by margin improvements, including stronger adjusted gross margin performance and continued expense discipline, while still investing strategically in areas tied to long-term growth, such as AI-enabled software expansion and next-generation hardware development.

The company reported an adjusted EBITDA loss of $8.1 million, indicating that operations are still running at a negative margin despite incremental improvement from the prior year. Gross margin for the quarter was also negative at 17.5%, largely due to a $17.4 million non-cash inventory write-off tied to excess legacy chip components. Even when excluding this adjustment, the company did not achieve profitability, as it continues to operate with an adjusted loss position. 

Valuation of TEM and BFLY

Tempus is trading at a forward 12-month price-to-sales (P/S) ratio of 8.18, above its median of 8.01. Butterfly Network’s forward sales multiple is 6.45, above its one-year median of 5.55. However, BFLY is trading at a discount to TEM.

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How Do Zacks Estimates Compare for TEM & BFLY?

For 2025, the loss per share for TEM is projected to be 65 cents compared with the year-ago loss of $1.58 per share. The loss per share estimates have narrowed 3 cents over the past 30 days.

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For 2025, BFLY’s loss per share is projected to be 15 cents compared with the prior-year loss of 34 cents. The loss per share estimates have remained stable over the past 30 days.

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TEM or BFLY: Which One to Pick?

Overall, both Tempus and Butterfly Network are progressing toward stronger operational footing, but they stand at different points in their profitability journey. Tempus has reached a meaningful inflection point, achieving positive adjusted EBITDA for the first time while demonstrating balanced growth across its business segments, supported by improved commercial execution and disciplined cost control. Butterfly Network, meanwhile, continues to show resilience and steady performance, delivering revenue growth even in a seasonally softer period while reducing cash burn and investing in next-generation technology and AI capabilities. While BFLY is yet to achieve profitability, its operational efficiency gains and product innovation signal ongoing momentum.

For investors, Tempus appears to be the stronger choice, as it has outperformed Butterfly Network over the past year and its estimates have improved. However, for investors seeking a more discounted entry, Butterfly Network may offer deeper value but with meaningfully higher risk. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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