On 9 October 2025, Cashu Research initiated coverage on Life360 (ASX: 360) with a SELL rating and a 12-month price target of A$30.16, against a share-price reference of A$53.63. Twelve months on, the A$19.53 closing price for 8 October 2026 puts the shares roughly 64% below our initiation price and about 35% below the original target.
The call was right on price, but not entirely for the reasons we gave. Life360's operating results have mostly beaten our forecasts. Our assessment is that the change in what investors would pay for that growth mattered more than a deterioration in the business. This review separates the valuation argument that held up from the operating risks we overstated.
Read the original research
Life360: Strong Growth, Stretched Valuation · 9 October 2025 · Download the original report (PDF)
The 2025 report was authored by Tim Halliday. Its rating and target are historical. This article is a retrospective, not a new rating or price target.
Life360 share-price performance
What we said in October 2025
Our headline argument was simple: Life360 was a good business on a stretched valuation. The stock had risen more than 250% over the preceding twelve months and traded at a substantial premium to the peer set used in our report.
We blended a five-year discounted cash-flow valuation, using a 7.3% WACC and 3% terminal growth, with an 8x EV/sales approach, weighted 50/50. Our selected peers traded at a median 4.1x forward EV/sales, while the Australian software comparison set had a median of 8.3x. We judged a 7–9x range appropriate for Life360 at the time.
We also identified three operating risks: competition from free alternatives such as Apple's Find My; dependence on subscription growth and free-to-paid conversion; and an advertising opportunity that was still unproven and exposed to privacy and reputational risk. Faster premium-tier uptake, international growth and stronger advertising monetisation were explicit upside risks to our SELL thesis.
What happened to the business
The share-price outcome should not be mistaken for an operating collapse. Life360 continued to expand its customer base, grow revenue and develop its advertising business:
- FY25: revenue increased 32% to US$489.5 million, while adjusted EBITDA reached US$93.2 million. Global monthly active users reached 95.8 million, and the company added a record 576,000 Paying Circles during the year.
- January 2026: Life360 completed the approximately US$120 million Nativo acquisition, expanding its advertising platform.
- Q2 2026: revenue grew 38% year on year to US$159.0 million. Monthly active users reached approximately 102.4 million, and Paying Circles increased 27% to approximately 3.2 million.
- Advertising: Q2 revenue reached US$22.0 million, up 315% year on year. The company attributed much of that growth to new offerings following the Nativo acquisition, so it should not be read as purely organic growth.
- FY26 outlook at the Q2 result: consolidated revenue guidance was US$650–685 million, with adjusted EBITDA guidance of US$130–140 million.
Those results support the central distinction in this review: a company can execute well and still deliver a poor share-price outcome if its starting valuation assumes too much.
Our forecasts versus the results
| Metric (US$m) | Our 2025 forecast | Actual / guidance |
|---|---|---|
| FY25 revenue | 468.0 | 489.5 actual |
| FY25 adjusted EBITDA | 81.9 | 93.2 actual |
| FY26 revenue | 572.9 | 650–685 guidance |
| FY26 adjusted EBITDA | 128.9 | 130–140 guidance |
FY26 figures are company guidance, not completed full-year results. Adjusted EBITDA is a non-GAAP measure; readers should consider the company's definitions and reconciliations alongside statutory earnings.
Our forecasts proved conservative. FY25 revenue and adjusted EBITDA exceeded the original estimates, while the FY26 guidance ranges sit above them. The share price fell anyway. That reinforces our valuation argument rather than a claim that the operating business disappointed.
Scorecard: what held up, and what did not
Valuation was the call that mattered. We argued the shares were priced for near-perfect execution on a premium multiple. Life360 has largely executed, yet the shares have fallen below our original target. Our view is that the de-rating did more of the work than our operating concerns.
Competition: the immediate impact was weaker than we expected. The continued growth in Paying Circles and the move beyond 100 million monthly active users do not support a thesis that free alternatives would quickly derail the platform. They do not eliminate competitive risk, but they require us to acknowledge Life360's resilience.
Subscription reliance: still relevant, but not a broken business. Subscriptions generated US$115.6 million of Q2 revenue, approximately 73% of the total. Global monthly-active-user growth was 16% year on year in Q2, compared with 20% at the end of FY25. Conversion, retention and revenue per Paying Circle remain important, even as advertising diversifies revenue.
Advertising: we were too sceptical about its near-term contribution. The US$22.0 million quarterly revenue figure is a meaningful business contribution. Nativo has changed the scale and scope of the opportunity, although integration, margins and responsible use of data remain risks to monitor.
Where Life360 stands now
The valuation picture has changed. Using the approximate US$3.3 billion market-capitalisation reference in this review and FY26 revenue guidance of US$650–685 million gives roughly 5x forward revenue. That is a rough market-capitalisation-to-sales comparison, not the EV/sales methodology used in our original valuation. A fresh assessment needs to account for cash, debt, acquisitions, dilution and exchange rates.
The next quarterly result will test whether Life360 can keep expanding subscriptions and advertising while converting revenue growth into sustainable earnings and cash flow. The Q2 release maintained an approximately 20% full-year adjusted EBITDA margin outlook and highlighted continuing investment in international expansion, advertising and AI initiatives. Guidance is not a guarantee.
Our view: the de-rating we anticipated has occurred, and the share-price reference now sits well below our 2025 target. That is a reason to revisit the model, not to carry a year-old recommendation forward without fresh work. Any change to our rating or target will be published as a formal coverage update rather than implied by this article.
Revisit our original Life360 report to compare the valuation, assumptions, forecasts and risks with the outcomes discussed here.
Sources and disclosure
- Cashu Research: Life360, Strong Growth, Stretched Valuation, 9 October 2025.
- Yahoo Finance: Life360 (360.AX) historical daily closing prices.
- Life360 FY25 and Q4 results, 2 March 2026.
- Life360's Nativo acquisition completion announcement, 5 January 2026.
- Life360 Q2 results and FY26 guidance, 10 August 2026.
Share-price and approximate market-capitalisation references are dated snapshots from this review, not live quotes. Share prices are ASX CDI prices in Australian dollars; company financials are in US dollars. The approximately 64% decline is a price comparison, not a total-return or realised investment-performance calculation. Past performance is not a reliable indicator of future performance.
This information is general in nature and does not constitute personal advice. It does not consider your objectives, financial situation or needs. Cashu Research is part of Cashu Technology Pty Ltd, an authorised representative (AR No. 001318029) of Adviser Solutions Group Pty Ltd (ABN 88 601 875 521, AFSL 485946). Read the original report and its full disclosures before relying on the historical valuation.