Life 360 shares halted ahead of Nasdaq IPO

Life360 requested a trading halt today as it prepares for an announcement.

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A laughing woman holds her hands up, indicating a share price racing higher ahead of a trading halt on the ASX market

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Life360 Inc (ASX: 360) has requested a trading halt today pending an announcement regarding its proposed US initial public offering (IPO) of new shares of common stock on Nasdaq.

Investors have been buying up the Life360 shares in recent months, doubling the share price since the beginning of the year. At the time of writing, the Life360 share price is trading at $14.69.

Rapid growth

Life360 is a leading technology platform connecting millions of people worldwide. The Life360 mobile application offers features including communication, driving safety, digital safety, and location sharing.

The company has experienced rapid growth in recent years, particularly in the United States. Life360's subscription revenue rose from US$86.6 million in 2021 to US$220.8 million in 2023. Management believes its core subscription revenue could continue growing by at least 20% in 2024.

While the company is still incurring a net loss, it has reduced from $33.6 million in 2021 to $28.2 million in 2023.

Listing on Nasdaq

Earlier this week, Life360 announced the launch of its US IPO, offering 5,750,000 shares of common stock. The company plans to use the proceeds from the offering to enhance its financial flexibility, create a public market for its stock in the US, and for general corporate purposes.

Once completed, the company expects to trade on Wall Street under the ticker code Life360 Inc (NASDAQ: LIF). The company's Chess Depositary Interests (CDIs), representing shares of common stock, will remain listed on the Australian Securities Exchange (ASX).

What does this mean for ASX investors?

As my colleague James highlighted, analysts at Bell Potter believe this could be positive news for Life360 shares and its current shareholders. The broker previously noted:

Key potential catalysts for the stock include another strong quarter of paying circle growth in Q2 (April was another good month), a potential upgrade to the 2024 guidance sometime in H2, and a U.S. listing at some stage in the next 12 months.

We have increased the multiple we apply in the EV/Revenue valuation from 5.5x to 6.5x given the proposed US listing and potential re-rating of the stock given the much higher multiples of comps like Reddit (NYSE: RDDT).

Bell Potter has a buy rating and a $17.75 price target on Life360 shares.

Motley Fool contributor Kate Lee 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. 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.

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