U.S. Markets closed

Life360, Inc. (ASX:360): Are Analysts Optimistic?

Simply Wall St

Life360, Inc.'s (ASX:360): Life360, Inc. develops and delivers a mobile application (App) in the United States and internationally. With the latest financial year loss of -US$19.4m and a trailing-twelve month of -US$28.9m, the AU$483m market-cap amplifies its loss by moving further away from its breakeven target. The most pressing concern for investors is 360’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for 360.

See our latest analysis for Life360

360 is bordering on breakeven, according to the 3 Software analysts. They expect the company to post a final loss in 2020, before turning a profit of US$733k in 2021. Therefore, 360 is expected to breakeven roughly a couple of months from now! In order to meet this breakeven date, I calculated the rate at which 360 must grow year-on-year. It turns out an average annual growth rate of 74% is expected, which is rather optimistic! If this rate turns out to be too aggressive, 360 may become profitable much later than analysts predict.

ASX:360 Past and Future Earnings, January 31st 2020

I’m not going to go through company-specific developments for 360 given that this is a high-level summary, however, take into account that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before I wrap up, there’s one aspect worth mentioning. 360 currently has no debt on its balance sheet, which is quite unusual for a cash-burning loss-making, growth company, which typically has high debt relative to its equity. 360 currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are too many aspects of 360 to cover in one brief article, but the key fundamentals for the company can all be found in one place – 360’s company page on Simply Wall St. I’ve also compiled a list of important aspects you should look at:

  1. Valuation: What is 360 worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether 360 is currently mispriced by the market.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Life360’s board and the CEO’s back ground.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.