Life360 Inc. (ASX: 360) has been one of the more frustrating ASX growth shares to own recently.
The share price is trading around $22.12, which is roughly 60% below its 52-week high of $55.87.
That kind of fall can create opportunity if the business underneath is still moving in the right direction.
But is that the case? Here's my take.
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The valuation looks interesting
According to CommSec, consensus earnings per share estimates are 90.4 cents in FY26, $1.23 in FY27, and $2.13 in FY28.
Based on the current share price, that puts the stock on roughly 24 times FY26 earnings, 18 times FY27 earnings, and just over 10 times FY28 earnings.
For a slow-growth business, that would not be enough to excite me. But Life360 is still expected to grow earnings strongly over the next few years.
If those forecasts prove close to the mark, the FY28 multiple looks very undemanding for a global consumer technology company with a large user base and several ways to monetise it.
There are no guarantees, of course. Management still has to deliver, but I am comfortable with the direction of travel.
A bigger opportunity than location sharing
The reason I like Life360 is that it has already earned a place in the daily routine of many households.
The app helps families stay connected, check locations, receive safety alerts, and feel more comfortable about where loved ones are. That practical, emotional use case is hard to replicate.
But the bigger opportunity is what Life360 can build around that relationship. The company recently reported monthly active users of approximately 97.8 million, up 17% year-on-year. Paying Circles increased 27% year-on-year to 3.0 million, while total revenue rose 38% to US$143.1 million.
Those numbers suggest the business is still growing across both scale and monetisation. In fact, management is forecasting MAU growth of 17% to 20% in 2026.
But it isn't just user growth driving higher revenue. Another thing I find especially interesting is the advertising opportunity. Life360 reported advertising revenue of US$19.7 million for the quarter, up 329% year-on-year. That could become a meaningful second growth engine alongside subscriptions.
A large, engaged user base can be valuable in several ways. Subscriptions, advertising, driving features, roadside support, Tile integration, and future AI tools could all add layers to the platform over time.
Why the fall may be overdone
A 60% fall from the high tells me the market has become far more cautious.
Some of that caution is understandable. ASX growth shares can be punished quickly when expectations change, and Life360 still needs to prove it can keep expanding while also growing earnings.
The threat of artificial intelligence (AI) disruption has also caused concerns. But I think Life360 has advantages that are not easy for an AI tool to copy, including a large installed user base, trusted family circles, location history, safety features, and habits built around daily use.
Foolish takeaway
Life360 shares are not risk-free, and I would expect volatility to continue. But I think the current setup is attractive.
The company has a large global audience, growing paid users, improving revenue streams, and a valuation that becomes far more appealing when looking out to FY27 and FY28.
If management can deliver on the earnings growth now expected by the market, I think this beaten-down ASX growth share could prove too cheap to ignore.
