Family tracking app Life360 has seen its value more than double in the past year, becoming a market favourite on the ASX. The California-based company provides a platform for family safety and location sharing, boasting features such as crash detection and emergency dispatch. Life360 recently reported a record 136,000 new subscribers in the June quarter, bringing its total paid users to 2.5 million, contributing to a 15 per cent stock surge in August. However, some fund managers are now questioning whether the stock is overheating after its substantial 137 per cent rally over the past 12 months.
Several analysts have voiced concerns about Life360’s current valuation. Morningstar equity analyst Roy Van Keulen warned clients that the shares, trading around $46.24, appear significantly overvalued, with a fair value estimate of $21. Van Keulen believes the market has excessively extrapolated potential revenue growth from advertising, which Life360 introduced last year. Other firms, like Bell Potter, maintain a “buy” rating but with a price target of $47.50, suggesting limited upside. Citi analyst Siraj Ahmed also reiterated a buy recommendation, noting Life360’s potential to evolve into a comprehensive family safety tech ecosystem.
Comparisons are being drawn to CSL, which experienced a sell-off after announcing job cuts and a vaccine unit spin-off. Ben Richards, co-portfolio manager of Seneca Australian small companies fund, suggests Life360 could face a similar fate if its valuation becomes unsustainable. Despite these concerns, not all analysts agree. ELM chief investment officer Jai Mirchandani believes Life360 has considerable growth potential, citing its large user base of 88 million, compared to its 2.5 million paid subscribers.
Ophir Asset Management’s Luke McMillan acknowledges Life360’s growth prospects but tempers expectations for future returns. While some funds are limiting their exposure, others remain confident in Life360’s long-term potential, highlighting the company’s ongoing upgrades and expansion opportunities. The debate over Life360’s valuation and future performance continues as investors weigh the company’s impressive growth against potential risks.
