Loop Capital Markets adjusted its outlook on Life360 (NASDAQ: LIF), a family safety platform provider, by increasing the price target to $43.00 from the previous $36.00 while maintaining a Buy rating on the stock.
The revision follows Life360's first quarter performance since its U.S. stock market debut. The company reported a 31% year-over-year growth in monthly active users (MAUs), surpassing its five-year compound annual growth rate of 24%.
Loop Capital highlighted Life360's efficiency in acquiring new users. The company saw a significant 35% year-on-year reduction in costs related to paid acquisitions and television marketing expenses. Despite this decrease in spending, Life360 plans to increase its investment during the upcoming back-to-school season, which is traditionally a period of strong user growth.
The analyst firm anticipates that the increased spending will bolster the company's performance in the near term, building on an already robust adoption rate. Loop Capital expressed confidence in Life360's trajectory towards reaching its long-term targets, which include 150 million MAUs, $1 billion in annual revenue, and a 25% EBITDA margin by the year 2029.
In other recent news, Life360 saw a series of positive ratings from analyst firms, indicating a promising future for the company. Stifel initiated coverage on Life360 with a Buy rating, highlighting the company's unique market position and potential for growth driven by international expansion and tiered service options. The firm also anticipates Life360 to exceed financial estimates with the development of its newly launched advertising business.
Similarly, JMP Securities started coverage on Life360 with a 'Market Outperform' rating, citing the company's growth potential and substantial lead in downloads and usage. Loop Capital initiated coverage on Life360 with a 'Buy' rating, forecasting substantial growth potential for the company driven by increased uptake of paid services and the launch of advertising. Evercore ISI gave Life360 an 'Outperform' rating based on the company's strong customer base and profitable business model. Lastly, Canaccord Genuity assigned a Buy rating to Life360, highlighting low penetration rates and demographic trends favoring growth.
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