The Life360 Inc (ASX: 360) share price has been a very strong performer in 2021.
Since the start of the year, the technology company's shares have stormed 49% higher.
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What is Life360?
Life360 is a San Francisco-based technology company. The company's core offering is the Life360 mobile app. It is a market leading app for families providing features such as communications, driving safety, and location sharing. At the end of March, it had more than 28 million monthly active users globally.
Despite facing tough trading conditions during COVID-19 (lockdowns, lower mobility), Life360 still delivered a 39% increase in normalised revenue to US$81.6 million during the 12 months ending 31 December.
Positively, with COVID-19 headwinds starting to ease, management is confident that its growth will continue in FY 2021. It is targeting Annualised Monthly Revenue in the range of US$110 million to US$120 million, which will be a 23% to 34% increase year on year.
Is the Life360 share price in the buy zone?
Although the Life360 share price has been on fire this year, Bell Potter remains bullish. The broker currently has a buy rating and $7.00 price target on its shares.
Based on the latest Life360 share price, this implies potential upside of 20% over the next 12 months.
It was pleased with its recent acquisition of Jiobit and believes it has a long runway for growth. Bell Potter also suspects that more acquisitions could be coming.
The broker explained: "When Life360 announced the proposed acquisition of Jiobit in late April it also said "the company will continue to evaluate both strategic and financial opportunities" and "this includes larger acquisitions … with a focus on companies in the insurance vertical". We therefore believe another acquisition is likely in the coming months in the insurance space but it is unclear exactly what type of company this will be (i.e. an insurance carrier, a managing general agent (MGA), an insurance agent?)."
"Our view is the most logical acquisition for Life360 in the insurance vertical is a digital insurance agent in the US given this is consistent with where the insurance market is heading (i.e. online sales) and is in the tech space. It is also compelling given the large and very engaged user base of Life360 in the US which serves to significantly lower the typically high customer acquisition cost for an insurance agent."
