If you are looking for big returns to supercharge your portfolio, then Life360 Inc (ASX: 360) shares could be worth considering.
That's the view of analysts at Bell Potter, who believe the ASX tech stock could be destined to rocket from current levels.
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What is the broker saying?
Bell Potter has been looking ahead to Life360's quarterly update. And while it isn't expecting a guidance upgrade, it does see potential for a beat to its earnings margin. It said:
We provide our quarterly forecasts this year for MAUs, paying circles, revenue and adjusted EBITDA. Life360 has already provided guidance for 1Q2026 of y-o-y MAU growth <20% (vs BPe 19%) and an adjusted EBITDA margin "in the low double digits" (vs BPe 11.6%). We note, however, the company has a good track record of beating guidance and, for instance, upgraded the 2025 guidance at the Q2 and Q3 results last year, then upgraded again in January and beat at adjusted EBITDA in March.
We therefore believe that, after setting expectations relatively low for Q1, there is some chance of a small beat, perhaps more in the adjusted EBITDA margin rather than MAU growth. We do not, however, see much if any chance of an upgrade to the 2026 guidance given, firstly, it is early in the year and, secondly, the relatively soft Q1. Further, the company did not upgrade the 2025 guidance at the Q1 result last year – just changed the revenue mix – despite the relatively strong start to the year.
Big potential returns for Life360 shares
In light of this, the broker remains very bullish and sees a lot of value in Life360 shares.
According to the note, the broker has retained its buy rating with a trimmed price target of $37.75 (from $40.00).
Based on its current share price of $19.65, this implies potential upside of 92% for investors over the next 12 months.
Bell Potter highlights that its valuation for Life360 shares has been trimmed to reflect a change in its model to a focus on earnings and cash flow. It explains:
We have removed the EV/Revenue valuation from our target price calculation given the market focus is now on earnings and cash flow valuations as well as the reasonable level of forecast earnings. We have also lowered the multiple we apply in the EV/EBITDA valuation from 45x to 37.5x and increased the WACC we apply in the DCF from 8.8% to 9.2%.
The net result is a 6% decrease in our TP to $37.75 which is still around double the share price so we maintain our BUY recommendation. We see the release of the Q1 result on 12th May as a potential catalyst given the company has already lowered expectations and the potential of a small beat in adjusted EBITDA.
