This year has been rough on the Life360 Inc (ASX: 360) share price but one top broker believes there are better days to come.
At the time of writing, the Life360 share price is $3.37. That’s 4% higher than its previous close but 65% lower than it was at the start of 2022.
For context, the S&P/ASX 200 Index (ASX: XJO) is up 0.6% today. It has slipped nearly 5% this year. Additionally, the S&P/ASX 200 Information Technology Index (ASX: XIJ) has also struggled this year, sliding 32%.
So, what has brokers bullish on the Life360 share price? Let’s take a look.
Why the Life360 share price could rise by 120%
The Life360 share price could have a 122.5% upside, according to Bell Potter.
The broker likes the company’s cash position and future profit prospects, The Motley Fool Australia’s James Mickleboro recently reported.
For those not familiar with the company, it’s the developer of the Life360 app. The app is designed to allow families to track their loved ones to ensure safety.
Life360 isn’t yet turning a profit. However, it did bring in US$52.7 million of revenue in the March quarter. It also boasted US$98.2 million of cash reserves as of the end of the quarter.
On top of that, the app was attracting 38.3 million active users at the end of March. That’s a 36% increase at the same point in 2021.
The company is expecting to break even in the final quarter of next year and be cash flow positive for the whole of 2024.
In the near term, it’s expecting its earnings before interest, tax, depreciation, and amortisation (EBITDA) to come to a loss of US$32 million to US$38 million in 2022.
All that considered, Bell Potter is very hopeful for the future of the stock. It has slapped a $7.50 price target and a buy rating on Life360 shares.