Why analysts say investors should buy these beaten down ASX shares

Analysts are saying that these beaten down shares are in the buy zone…

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If you’re looking for investment options, then the two beaten down shares listed below could be worth considering.

Here’s what analysts are saying about them:

Domino’s Pizza Enterprises Ltd (ASX: DMP)

This pizza chain operator’s shares are down 38% since the start of the year. This has been driven by a softer than expected performance in Japan and concerns over inflationary pressures.

While this is disappointing, the team at Morgans appear to believe it has created a buying opportunity for investors. The broker recently retained its add rating and put a $100 price target on its shares.

Based on the current Domino’s share price of $75.31, this implies potential upside of approximately 33%.

Morgans commented: “We upgraded to ADD after the result and, although inflationary pressures have worsened since then, we continue to believe there is meaningful upside to the current share price over the next 12 months.”

Life360 Inc (ASX: 360)

Another ASX share that has been beaten down is Life360. It is the company behind the hugely popular Life360 app, which is the world’s leading real time, location-sharing app used by families across the world to stay safe and communicate.

This week the company revealed that it now has 38.2 million global monthly active users, which was up 36% year on year. From these users, Life360 generated a 73% increase in annualised monthly revenue to US$166.1 million.

However, softer cash flows and news that it has cancelled its US listing plans weighed on the LIfe360 share price, which is now down 58% since the start of the year.

Bell Potter remains positive on the company and has retained its buy rating with a $8.25 price target. This implies over 100% upside for investors.

The broker said: “[An] 18% decrease in the PT to $8.25 which is >100% premium to the share price so we maintain our BUY recommendation. We believe the market reaction is unwarranted and likely driven by the poor operating cash flow in Q1 but we expect the cash flow to materially improve in Q2 and Q3 and then be positive in Q4.”

Motley Fool contributor James Mickleboro has positions in Life360, Inc. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Life360, Inc. The Motley Fool Australia has recommended Dominos Pizza Enterprises Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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