Life360 Inc (ASX: 360)
With the Q3 Update expected in early November, could you provide an opinion on Life 360 and its current share price?
The Latest Q&A
Answer
Hi Mark,
A tough question considering the moves the markets delivered through recent reporting season: a ~10% swing in one direction is likely but which way is tough to call right now.
- We like 360 and hold it in our Emerging Companies Portfolio but like many tech companies it has been hammered on AI disruption fears.
The family safety and location-tracking technology company has suffered a decent valuation reset, with shares falling more than 50% from its 2025 high, despite continued strong business growth.
- The latest setback came after its August quarterly update, when shares fell around 30% after management maintained, rather than upgraded, full-year guidance as the market was clearly positioned for.
Importantly, 360’s share price collapse has not been matched by a deterioration in its underlying business. June quarter revenue increased 38% and adjusted EBITDA rose 53%, and monthly active users exceeded 102 million, while advertising revenue surged to US$22m, partly benefiting from the Nativo acquisition.
- Life360 remains a rapidly growing business, but its share price demonstrates the risks of owning highly valued growth stocks when bond yields rise and market sentiment shifts.
With much of the previous valuation premium now removed, the key to a sustained recovery will be continued subscriber growth, stronger advertising monetisation and improving margins, rather than simply delivering growth that investors already expect.
We are long and bullish toward 360 but November’s update will be very important.
