Life360, Inc. (ASX:360) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Life360, Inc. engages in the manufacture and sale of subscription and hardware tracking devices in North America, Europe, Middle East and Africa, and internationally. The AU$991m market-cap company announced a latest loss of US$92m on 31 December 2022 for its most recent financial year result. As path to profitability is the topic on Life360's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Check out our latest analysis for Life360
Consensus from 4 of the Australian Software analysts is that Life360 is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of US$21m in 2025. So, the company is predicted to breakeven approximately 2 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 102% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for Life360 given that this is a high-level summary, though, bear in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 3.1% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Life360, so if you are interested in understanding the company at a deeper level, take a look at Life360's company page on Simply Wall St. We've also put together a list of pertinent factors you should look at:
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Valuation: What is Life360 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 Life360 is currently mispriced by the market.
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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 background.
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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.