Top broker says unloved Life360 share price has 120% upside

This ASX 200 tech share has been tipped to more than double.

| More on:
A young woman wearing a blue blouse with white polkadots holds her phone up with an intrigued and happy look on her face as she reads news about the top ASX 200 shares today

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The Life360 share price has had a shocking run in 2022, but one top broker is predicting big things to come
  • Over the course of this year so far, the stock has tumbled 65%. According to Bell Potter, that leaves it with an upside of more than 120%
  • The broker likes the company's cash position and forecasted cash flow

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.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in 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 Scott Phillips.

More on Technology Shares

a man sits back from his laptop computer with both hands behind his head feeling happy to see the Brambles share price moving significantly higher today
Earnings Results

Life360 share price rises as revenue more than doubles

Life360 lands solid subscriber growth, but at what cost?

Read more »

A woman looks internationally at a digital interface of the world.
Technology Shares

Better ASX tech buy: Xero or Altium?

Let's put these two WAAAX shares to the test.

Read more »

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
Consumer Staples & Discretionary Shares

2 surprisingly ‘robust’ ASX shares to buy in current climate: expert

Real estate and consumer discretionary sectors might be the first to suffer as interest rates rise. But here are a…

Read more »

Two people shaking hands in the boardroom on a merger.
Technology Shares

Guess which ASX All Ords share just inked a new deal with Fortescue

Sadly, the deal hasn't been enough to save the ASX All Ordinaries share from the red.

Read more »

A woman shrugs and pulls awkward expression with her face.
Materials Shares

Is Novonix considered an ASX lithium share?

Can Novonix be considered an ASX lithium stock?

Read more »

One young boy jumps off a step ladder and is captured mid-air about to land on a seesaw where his friend is standing with a wide smile on his face looking at the camera and holding his thumbs up as though he is excited for the ride to come. Both young boys are wearing business suits.
Mergers & Acquisitions

Nearmap share price jumps 30% on takeover news

The Nearmap share price rallied 33% to $2.01 in early trade on Monday, but remains below the bid price.

Read more »

A group of five people dressed in black business suits scrabble in a flurry of banknotes that are whirling around them, some in the air, others on the ground as some of them bend to pick up the money.
Technology Shares

2 ASX tech shares about to go cash-flow positive

After massive interest rate rises, using your own cash to operate is so much better than borrowing to survive.

Read more »

Galan Lithium share price falling asx share price represented by a sad and flat battery
Technology Shares

Novonix share price tumbles 6% on Friday. What’s going on?

It's proving to be a rough day for this ASX 200 tech share.

Read more »