Broker says Life360 (ASX:360) share price has ~80% upside

Life360’s shares could be great value according to analysts…

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The Life360 Inc (ASX: 360) share price was one of the best performers on the Australian share market in 2021.

Unfortunately, in 2022 it has been among the worst performers. Since the start of the year, the Life360 share price has lost 21% of its value due to broad weakness in the tech sector.

Is the Life360 share price good value now?

While the weakness in the Life360 share price is disappointing for shareholders, it could be a buying opportunity for non-shareholders.

In fact, if Bell Potter is on the money with its recommendation, there could be some significant upside for investors over the remainder of 2022.

According to a note this week, the broker has retained its buy rating with a trimmed price target of $13.50.

Based on the current Life360 share price of $7.64, this implies potential upside of 77% over the next 12 months.

What did the broker say?

Bell Potter has been running the rule over Life360’s fourth quarter update and liked what it saw.

The broker commented: “Life360 reported a strong 4Q2021 with q-o-q increases of 5% in global monthly active users to 35.5m (vs BP forecast 35.6m), 11% in global paying circles to 1.23m (vs BP forecast 1.15m) and 19% in revenue to US$35.0m (vs BP forecast US$33.5m). The company also met or exceeded all of its key guidance metrics.”

And while the broker has reduced its price target on the Life360 share price, it has only done this out of conservatism and not because it is becoming less bullish.

Its analysts explained: “We have updated each valuation used in the determination of our forecasts for the modest changes in our forecasts as well as recent market movements. We have also decreased the premium applied in the EV/Revenue valuation from 40% to 30% just for conservatism. The net result is a 10% decrease in our PT to $13.50 which is still a material premium to the share price and we maintain our BUY recommendation.”

Should you invest $1,000 in Life360 right now?

Before you consider Life360, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Life360 wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

Motley Fool contributor James Mickleboro owns Life360, Inc. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Life360, Inc. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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