Life360 Stock To $48?
Life360 (LIF) stock has jumped 24% during the past day, and is currently trading at $68.10. Our multi-factor assessment suggests that it may be time to reduce exposure to LIF stock. We are primarily concerned current valuation and a price of $48 may not be out of reach. We believe there is not much to fear in LIF stock given its overall Strong operating performance and financial condition. But given its Very High valuation, the stock appears Relatively Expensive.
Below is our assessment:
| CONCLUSION | |
|---|---|
| What you pay: | |
| Valuation | Very High |
| What you get: | |
| Growth | Very Strong |
| Profitability | Weak |
| Financial Stability | Very Strong |
| Downturn Resilience | N/A |
| Operating Performance | Strong |
| Stock Opinion | Relatively Expensive |
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Let’s get into details of each of the assessed factors but before that, for quick background: With $5.3 Bil in market cap, Life360 provides a mobile application for families offering communication, location sharing, and driving safety features in the United States and internationally.
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[1] Valuation Looks Very High
| LIF | S&P 500 | |
|---|---|---|
| Price-to-Sales Ratio | 11.5 | 3.4 |
| Price-to-Earnings Ratio | 178.7 | 24.8 |
| Price-to-Free Cash Flow Ratio | 94.3 | 21.6 |
This table highlights how LIF is valued vs broader market. For more details see: LIF Valuation Ratios
[2] Growth Is Very Strong
- Life360 has seen its top line grow at an average rate of 35.8% over the last 3 years
- Its revenues have grown 34% from $343 Mil to $459 Mil in the last 12 months
- Also, its quarterly revenues grew 34.1% to $124 Mil in the most recent quarter from $93 Mil a year ago.
| LIF | S&P 500 | |
|---|---|---|
| 3-Year Average | 35.8% | 5.6% |
| Latest Twelve Months* | 33.9% | 6.4% |
| Most Recent Quarter (YoY)* | 34.1% | 7.3% |
This table highlights how LIF is growing vs broader market. For more details see: LIF Revenue Comparison
[3] Profitability Appears Weak
- LIF last 12 month operating income was $16 Mil representing operating margin of 3.4%
- With cash flow margin of 14.0%, it generated nearly $64 Mil in operating cash flow over this period
- For the same period, LIF generated nearly $30 Mil in net income, suggesting net margin of about 6.5%
| LIF | S&P 500 | |
|---|---|---|
| Current Operating Margin | 3.4% | 18.8% |
| Current OCF Margin | 14.0% | 20.5% |
| Current Net Income Margin | 6.5% | 13.1% |
This table highlights how LIF profitability vs broader market. For more details see: LIF Operating Income Comparison
[4] Financial Stability Looks Very Strong
- LIF Debt was $310 Mil at the end of the most recent quarter, while its current Market Cap is $5.3 Bil. This implies Debt-to-Equity Ratio of 5.8%
- LIF Cash (including cash equivalents) makes up $456 Mil of $787 Mil in total Assets. This yields a Cash-to-Assets Ratio of 57.9%
| LIF | S&P 500 | |
|---|---|---|
| Current Debt-to-Equity Ratio | 5.8% | 19.4% |
| Current Cash-to-Assets Ratio | 57.9% | 7.2% |
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