Life360 Inc (ASX: 360) shares were on form yet again on Monday.
The ASX tech stock started the week with a 17% gain to $14.18.
This means that the location technology company's shares have now risen 88% since the end last year.
To put that into context, if you had invested $20,000 into Life360's shares on the final trading day of 2023, your investment would now be worth almost $38,000.
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Why is this ASX tech stock rocket on Monday?
Investors were fighting to get hold of the company's shares following the release of a trading update.
That update revealed that Life360 had a record first quarter with global Monthly Active Users (MAU) reaching 66.4 million at the end of the first quarter.
This represents an increase of 4.9 million since the end of the fourth quarter and means a record for a first quarter. It is also more than double the net additions of 2.2 million the company recorded in the prior corresponding period.
The company also reported record first quarter net additions to global paying circles of approximately 96,000. This was split approximately 65%/35% between its U.S. and International operations.
Finally, also catching the eye was news that the ASX tech stock has its eyes on a dual listing on Wall Street. It is looking to make some changes to its Certificate of Incorporation to bring the company in line with typical U.S. corporate practices. This is something which could pave the way to a listing in the United States.
Broker response
Analysts at Goldman Sachs were blown away by the quarterly update. While the broker doesn't do quarterly estimates, it highlights that this update is run-rating significantly ahead of expectations for the first half. Goldman said:
Life360 has provided a trading update for 1Q24. We do not model Life360 quarterly but note that the company is run-rating well ahead of our 1H24 expectations, particularly for U.S. subscription net adds (most important driver of Life360's revenue/earnings). Operating metrics can be volatile quarter to quarter, and we note that this follows a relatively softer 4Q23, however in our view Life360 has started FY24 strongly and should be comfortably tracking to meeting revenue guidance and potentially exceeding EBITDA guidance.
The team at Bell Potter was equally impressed with the update. The broker said:
Life360 provided a positive and unexpected market update with two key metrics in 1Q2024 materially exceeding both our and market expectations. […] Both metrics are clearly very strong but in our view the growth in paying circles is key as this metric disappointed somewhat in 4Q2023 with an increase of only 55k – albeit after very strong growth in 3Q2023 – so growth of 96k in 1Q2024 signals a strong rebound.
In response, Bell Potter has reiterated its buy rating on the ASX tech stock with an improved price target of $16.25. This implies potential upside of almost 15% for investors from current levels.
