Investors Who Bought Life360 (ASX:360) Shares A Year Ago Are Now Up 189%
Unless you borrow money to invest, the potential losses are limited. But when you pick a company that is really flourishing, you can make more than 100%. Take, for example Life360, Inc. (ASX:360). Its share price is already up an impressive 189% in the last twelve months. It's also good to see the share price up 53% over the last quarter. Note that businesses generally develop over the long term, so the returns over the last year might not reflect a long term trend.
Check out our latest analysis for Life360
Life360 isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
In the last year Life360 saw its revenue grow by 37%. We respect that sort of growth, no doubt. The revenue growth is decent but the share price had an even better year, gaining 189%. Given that the business has made good progress on the top line, it would be worth taking a look at its path to profitability. But investors need to be wary of how the 'fear of missing out' could influence them to buy without doing thorough research.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. If you are thinking of buying or selling Life360 stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
It's nice to see that Life360 shareholders have gained 189% over the last year. And the share price momentum remains respectable, with a gain of 53% in the last three months. This suggests the company is continuing to win over new investors. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Take risks, for example - Life360 has 3 warning signs we think you should be aware of.
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU exchanges.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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