Life360 Inc. (ASX: 360) shares are down around 55% over the past 12 months.
That is a painful fall for existing shareholders, but the technology business itself has continued moving forward.
I think September could offer an attractive entry point for investors prepared to look several years ahead.
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A much bigger audience
As of the end of the second quarter, Life360 has around 102.4 million monthly active users globally, up 16% year-on-year.
Crossing 100 million users is significant because Life360 has created an enormous audience around something families use regularly.
The original location-sharing service remains central, but Life360 is gradually extending its role into driving safety, emergency assistance, identity protection, connected devices, pets, and ageing family members.
I think that gives the company plenty of ways to make its existing audience more valuable over time.
International growth also remains a major opportunity. Life360 is already used around the world, but many overseas markets are much less developed commercially than the US.
More ways to make money
Life360's growth is no longer dependent on one source. Paying Circles reached 3.2 million during the second quarter, up 27% year-on-year, while subscription revenue increased 31%.
Converting more free users into paying members remains its biggest opportunity, but there's more to the company than that.
Life360 generated $22 million of advertising revenue during the second quarter, more than four times the amount from a year earlier.
With more than 100 million users, advertising could become a meaningful business without requiring every family to buy a subscription.
Combined with memberships and new family-focused products, I think Life360 now has several routes to increase the value generated from its platform.
The fall does not remove the risks
I think a 55% decline has made Life360 shares great value. But it doesn't remove all risks.
Growth shares can be volatile. Life360 also needs to keep users engaged, grow advertising without damaging the experience, develop successful new services, and show that international markets can become more valuable.
There is plenty to execute on. But the latest numbers still show strong momentum. Second-quarter revenue increased 38% year-on-year, while adjusted EBITDA rose 53%.
For me, that makes the share price decline easier to view as an opportunity rather than evidence that the growth story has stalled.
Foolish takeaway
A year ago, investors were paying substantially more for a smaller Life360 business.
Today, the company has surpassed 100 million monthly users; its subscription base continues to expand, and advertising is starting to make a meaningful contribution.
There will likely be more volatility ahead. But for investors willing to be patient, I think the 55% decline has made Life360 shares worth buying in September.
