Life360, Inc. (ASX:360): Are Analysts Optimistic?

With the business potentially at an important milestone, we thought we'd take a closer look at Life360, Inc.'s (ASX:360) future prospects. Life360, Inc. operates a technology platform to locate people, pets, and things in North America, Europe, the Middle East, Africa, and internationally. With the latest financial year loss of US$28m and a trailing-twelve-month loss of US$30m, the AU$5.4b market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Life360's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Life360

Life360 is bordering on breakeven, according to the 14 Australian Software analysts. They expect the company to post a final loss in 2024, before turning a profit of US$6.6m in 2025. Therefore, the company is expected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 67% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Life360's growth isn’t the focus of this broad overview, but, take into account that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that Life360 has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Life360 to cover in one brief article, but the key fundamentals for the company can all be found in one place – Life360's company page on Simply Wall St. We've also put together a list of important factors you should further research:

1. Valuation: What is Life360 worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Life360 is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Life360’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.