The Life360 Inc (ASX: 360) share price was on fire on Friday.
So much so, the location technology company's shares ended the session 18% higher at a record close of $17.56.
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Why did the Life360 share price break records?
Investors were bidding the ASX 200 tech stock higher after being blown away by its second quarter update.
Life360 reported a 20% increase in second quarter revenue to a record of US$84.9 million and positive adjusted EBITDA of US$11 million.
In light of this strong performance, management upgraded its guidance for FY 2024. It now expects consolidated revenue of US$370 million to US$378 million and positive adjusted EBITDA of US$36 million to US$41 million.
This compares to its previous guidance of US$365 million to US$370 million and US$30 million to US$35 million, respectively.
Can its shares continue rising?
It seems quite likely that the Life360 share price will continue its ascent on Monday.
That's because its US listed shares ended after-hours trade on Wall Street at US$36.50, which is the equivalent of A$55.54.
And with its US shares worth three ASX listed shares, this equates to a share price of A$18.51, which is comfortably ahead of Friday's close price.
But it isn't just that. Brokers are also tipping the Life360 share price to rise further from here.
For example, according to a note out of Bell Potter, its analysts have reiterated their buy rating and lifted their price target to $20.50 (from $19.00). This implies potential upside of almost 17% for investors from current levels.
Bell Potter was impressed with the company's performance ahead of the traditionally strongest quarter of the year. It said:
2Q2024 revenue of US$84.9m was in line with our forecast but adjusted EBITDA of US$11.0m was well ahead of our forecast of US$8.0m. The key metrics of total paying circles, AMR and ARPPC were all ahead of our forecasts with the highlight being a record quarter for growth in paying circles of 132k.
On the back of the strong result and guidance upgrade we have increased the multiple we apply in the EV/Revenue valuation from 6.0x to 6.25x and reduced the WACC we apply in the DCF from 9.3% to 9.1%. This combined with the changes in our forecasts has resulted in an 8% increase in our PT to $20.50 which is >15% premium to the share price so we maintain our BUY recommendation. Potential catalysts include the Q3 result in November – typically the strongest quarter for paying circle growth – and a step up in advertising revenue in both Q3 and Q4. Increased clarity around the new Placer.ai deal could also be a positive as well as early success for Hubble.
