The family safety and location-tracking app has gained traction with investors by showing strong user growth and expanding its monetisation strategy. The California-based company added 136,000 new subscribers during the June quarter, pushing its paid user base to 2.5 million. This surge has driven the share price higher, up 16% in August alone, positioning the stock as one of the top-performing tech names on the ASX this year.
The company has also ridden the wave of investor interest in high-growth tech firms, with several fund managers singling out Life360 as a favoured pick this earnings season. Still, doubts are emerging about whether the current price accurately reflects the company’s value. After a near 140% increase over the past year, some analysts argue that market optimism may be outstripping the company’s underlying performance.
Critics highlight the current share price of $46.48, which exceeds several analysts' valuation estimates. One equity research firm puts the fair value at only $21, suggesting that assumptions regarding future advertising revenue may be too ambitious. Although paid user growth remains strong, there is uncertainty about the long-term value of the platform’s advertising data and digital assets.
Nonetheless, a number of investment firms continue to back Life360’s long-term prospects. Some view the stock as a strong long-term buy, believing that the shift from a simple app to a comprehensive family tech ecosystem makes for a promising growth path. Others acknowledge the recent gains but urge caution, especially for newcomers investing at current price levels, with expectations of similarly large returns potentially misguided.
Looking broadly, Life360 still shows potential to convert more of its 88 million users into paying subscribers while boosting ad revenue growth. Even so, the trajectory of past high-growth stocks underscores the importance of maintaining valuation discipline during rapid share price increases. The current debate is whether Life360 represents an early-stage growth story or a fast riser approaching its peak.
