Life360 Inc (ASX: 360) shares have fallen by just over 30% over the past 12 months, posing the question: is it time to buy back in?
The company is scheduled to report its second quarter results next week, and if they're anything like the first quarter results the shares could perform well.
The analyst team at Macquarie has investigated the stock ahead of next week's release, assigning it an outperform rating and a bullish share price target, which we'll get to shortly.
First, let's look at why Macquarie is predicting a good result.
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Advertising a growth driver
The analyst team have looked at job advertisements in the US, and have come to the conclusion that Life360 is positioning itself for growth.
The analyst team said:
Recent job ads suggest Life360 is looking to build out the Programmatic/CTV advertising business, with key … roles being hired for in the US. This builds on the functionality acquired in the Fantix & Nativo acquisitions, and drives (alongside CPM expansion and underlying organic growth) our US$56.4m Advertising revenue growth assumption in FY27.
The Macquarie team also said Life360's Apple Watch functionality was released recently, which was a positive.
They said:
This feature was launched in July 26, and although it will not impact the 2Q26 result, we expect an update at the result. This extends 360's total addressable market downward into younger children that do not yet have a mobile phone. This extends monthly active user growth potential, creating an earlier subscription conversion opportunity, particularly in the high-value US market, where iOS users are ~70% of the devices in market.
Macquarie said this could also drive subscription growth through improved retention and higher conversion rates, with the parents of young children more willing to pay for safety products.
Life360 shares looking cheap
Regarding the current share price, Macquarie said:
Current share price presents an asymmetric risk profile for investors, capitalising a mature subscription growth profile with advertising a growth option.
Macquarie has revised its share price target down from $33.10 to $31.10, still well above the current share price of $27.21.
What was reported last quarter?
In May, the company reported that its monthly active users hit 97.8 million, up 17% year-on-year, while revenue grew 38% to US$143.1 million.
Chief Executive Officer Lauren Antonoff said:
The value we deliver to our members powered record-breaking Paying Circle additions in Q1. At the same time, our Life360 Ads platform scaled to become a material part of our business. And with AI, we're moving faster than ever to transform Life360 into the super app that makes everyday family better. Looking ahead, we expect revenue growth acceleration into the back half of 2026 driven by both our core subscription business and our advertising platform entering its strongest seasonal window.
Life360 is valued at $6.22 billion.
