After a 20% Slide, Is Life360 (ASX:360) Now a Hidden Growth Opportunity?

Life360’s 20% Drop Raises the Question, Time to Buy or Stay Away?

Life360 (ASX: 360) has been one of the standout ASX growth stories over the past year, but a pullback of around 22% from its all time high has prompted us to reassess whether this correction is creating a more attractive entry point. At its core, Life360 is best described as a modern, more socially embedded version of Find My iPhone, a location sharing app that has translated strong user adoption into meaningful shareholder value.

The business continues to execute well, even as it broadens its strategy through the acquisition of Nativo, which is designed to help build out an advertising based component to revenue alongside subscriptions. In the latest quarter, total revenue reached US$124M, up 34%, highlighting that growth remains very much intact despite recent share price weakness. When analysing any subscription driven app business, the key metric we focus on is monthly active users, as this is the clearest indicator of ongoing user engagement and the pipeline for future monetisation.

From our perspective, the recent sell off does not appear to reflect a deterioration in fundamentals, but rather a reset in expectations, which may give long term investors a more measured opportunity to start paying closer attention.

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it’s About Euphoria Cooling Off

Last quarter, monthly active users climbed 19% to 91 million, so the obvious question is why the market has shifted its tone on Life360. In our view, this is less about fundamentals and more about expectations resetting. We see this pattern repeatedly in stocks that have delivered extreme runs, names like DroneShield, Metallium, WiseTech and now Life360. Prices eventually converge back toward more normalised assumptions, and even strong results can be met with selling once expectations become too optimistic. That appears to be what is playing out now. After a 22% drawdown from the peak, we think it is reasonable for investors to start paying attention again, rather than chasing momentum at the top.

Nativo could be driving the advertising business

The Nativo acquisition is central to this debate. Life360 acquired the business for roughly A$120M, funded primarily with cash and a smaller equity component. Nativo generates around A$60M in annual revenue and is EBITDA positive, but the real strategic value sits in its advertising infrastructure. Nativo brings an established network of around 400 premium customers and integrations across roughly 20,000 websites and apps. Building that capability organically would have taken Life360 significant time and capital. At roughly a 2x revenue multiple, the acquisition looks sensible if early synergies translate into improved monetisation across the Life360 app. Execution remains key, but at this stage the deal appears more opportunistic than reckless, particularly as the growth narrative cools and valuations reset.

The Investors Takeaway for 360

Consensus estimates suggest Life360 could deliver topline revenue of around A$950M next year, representing growth of roughly 31%, alongside an EBITDA margin approaching 20% as operating leverage and profitability continue to improve. On current forecasts, consensus valuations imply a share price in the mid A$60s, which suggests there is still upside if the company can maintain momentum and execute on margin expansion, including the early benefits from Nativo.

For growth focused investors, this setup could prove opportunistic if execution remains strong. That said, the business is still exposed to macro conditions, particularly consumer spending and discretionary income, as well as competitive pressure in the app ecosystem. For more conservative investors, the current pullback may be better viewed as a reason to keep Life360 on a watch list rather than act immediately.