Life360 Inc (ASX: 360) shares have been making headlines this week after the company saw its share price tumble 19% following earnings results.
The company released Q2 2026 results yesterday, which prompted a major sell-off.
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What did the company report?
As reported by The Motley Fool yesterday, Life360 results included:
- Total revenue rose 38% year-over-year to US$159.0 million.
- Adjusted EBITDA increased 53% to US$31.1 million.
- Annualised Monthly Revenue grew 29% to US$537.2 million.
- Paying Circles jumped 27% to 3.2 million.
- Advertising revenue reached a record US$22 million, up 315% year-over-year.
- Operating cash flow grew 79% to US$23.8 million.
Commenting on the results, Life360's CEO, Lauren Antonoff noted:
This quarter, Life360 crossed 100 million monthly active users—proof of the trust millions of families place in us to stay connected, coordinated, and safe. Disciplined execution drove strong Paying Circle growth and put MAU back on the growth trajectory we outlined last quarter.
With the Life360 Ads Platform integration largely complete, we're now focused on building awareness and commercial momentum. In Q3, we're furthering our commitment to serve all life stages—from pet parents to kids and aging adults—reinforcing our position as the platform that makes everyday family life better.
Despite reporting record results, investors were seemingly left disappointed as they exited their positions in Life360 shares.
However, this selloff may have created a buy-low opportunity for value investors.
A new report from Bell Potter has suggested there is now significant upside for Life360 shares.
Good result
Despite the sell-off, Bell Potter said monthly active users growth, paying circle growth and adjusted EBITDA were all ahead of its forecasts.
Paying circles grew by 185,000, significantly above Bell Potter's 155,000 forecast and consensus of 136,000.
Adjusted EBITDA was US$31.1 million, also comfortably ahead of the US$25.7 million forecast.
However, around US$4 million of the EBITDA beat came from a tariff refund, meaning underlying EBITDA was closer to US$27 million.
Life360 left its 2026 guidance essentially unchanged, maintaining expectations for 17-20% MAU growth, US$650-685 million of consolidated revenue and US$130-140 million of adjusted EBITDA.
Big upside for Life360 shares
Based on this guidance, Bell Potter retained its buy recommendation and slightly reduced its price target to $34.00 (previously $35.00).
From yesterday's closing price following the heavy sell-off, this target indicates an upside potential of 43%.
The net impact on our target price is a 3% decrease to $34.00 which has all been driven by the DCF due to modest downgrades and changes in working capital assumptions. We retain our BUY recommendation and note we expect the buyback to be more active this quarter after only modestly commencing last quarter.
