Should you buy Life360 shares after its latest stunning milestone?

This high flying tech stock could keep rising according to Bell Potter.

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Life360 Inc (ASX: 360) shares were on form on Tuesday and pushed higher again.

The location technology company's shares rose almost 2.5% to $15.80.

This means that its shares are now up approximately 110% since the start of the year.

Why did Life360 shares charge higher?

Investors were buying the company's shares after it announced the achievement of another key milestone.

According to the release, Life360 has reached over 2 million global app paying subscriber circles. Its CEO, Chris Hulls, commented:

Reaching 2 million paying circles is a testament to the value Life360 delivers to families globally. Life360 is woven into the fabric of everyday family lives, simplifying how they communicate, keep connected, and stay safe. Our core subscribers are parents with kids of mobile phone and driving ages, and our platform helps families with everyday coordination and provides them with peace of mind. At the same time, we continue to see growth in circles beyond the traditional family. Achieving new heights with our paid memberships reflects strong global engagement and growth across segments.

Should you invest?

Bell Potter was impressed with the news, noting that it has achieved this milestone well ahead of expectations. The broker commented:

Life360 put out a media release saying it has just reached 2m global paying circles. This was notably ahead of our forecast which was 1.98m at 30 June 2024 and an increase of 86k in 2Q2024. The figure at 31 March 2024 was 1.90m so this indicates the company has already added c.100k this quarter and will exceed the 96k added in 1Q2024. This far exceeds the growth of 73k in 1Q2023 and 62k in 2Q2023 which was admittedly after the material price rises which were put through for iOS users in the US in 4Q2022.

The good news is that Bell Potter believes that Life360 could build on this in the coming quarter. It adds:

We also note that Q1 and Q2 are traditionally not the strongest quarters for paying circle growth and this rather is in Q3 with back-to-school in the US so the current momentum suggests another quarter of around 100k or more in 3Q2024.

In light of the above, the broker has reaffirmed its buy rating and lifted its price target on Life360 shares to $17.75. Based on its current share price, this implies potential upside of 12% for investors over the next 12 months. Bell Potter concludes:

The next potential catalyst for the share price is the release of the Q2/H1 result in early to mid August which we expect to be good and we see some potential of an upgrade to the guidance if not a narrowing of the ranges.

Motley Fool contributor James Mickleboro has positions in Life360. 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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