Life360 (ASX: 360) shares are once again in focus on Monday as more broker ratings roll in after the company's Q2 FY24 results earlier this month.
Shares in the family networking software company are currently swapping hands at $19.68, having climbed more than 24% in the past month.
And they are up nearly 2% on Monday at the time of writing.
Let's dive in.
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Expert rates Life360 shares a buy
Life360 shares have outperformed the broader market this year, so it's no surprise that brokers expect more from the stock.
Its Q2 FY24 results also came in ahead of many expectations, prompting brokers to chime in.
Revenues were up 20% year over year, underscored by a 25% growth in subscription revenue to US$66 million.
As a result, annualised monthly revenue (AMR) was up more than 23%, settling at US$305 million.
Following these results, Ord Minnett has reaffirmed its buy recommendation on Life360 in an update on Monday. It cites Life360's second-quarter performance in its reasoning.
Analyst Tony Paterno said the company's mobile networking safety app for families has shown growth across key metrics, according to The Bull. And the analyst reckons these trends look to be improving.
Paterno said:
This information technology company provides a mobile networking safety app for families. The company delivered another strong result in the second quarter of fiscal year 2024.
The company generated record quarterly results in monthly active users, paying circles and subscription revenue. It materially upgraded full year guidance. Encouragingly, 360's platform continues to strengthen amid improving unit economics. All structural trends remain in place and are accelerating.
The analysts' comments came at a time when Life360 shares set a new record high of $19.49 apiece last week. They are currently priced above this mark on Monday.
More brokers agree
The positive sentiment around Life360 isn't limited to Ord Minnett. Bell Potter analysts also have a buy rating on the stock with a recently increased price target of $20.50.
Bell's reaffirmed rating comes on the back of Life360's second-quarter update, which surpassed market expectations.
The broker pointed out the record growth in paying circles. This is seen as key to driving annualised monthly revenue (AMR) and average revenue per paying circle (ARPPC).
These both exceeded forecasts in Q2 as well.
On the back of the strong result and guidance upgrade we have increased the multiple we apply in the EV/Revenue valuation from 6.0x to 6.25x and reduced the WACC we apply in the DCF from 9.3% to 9.1%.
This combined with the changes in our forecasts has resulted in an 8% increase in our PT to $20.50 which is >15% premium to the share price so we maintain our BUY recommendation.
Bell says potential catalysts include Life360's Q2 FY24 results, due in November, and the contribution from its partnership with Hubble Network.
Morgan Stanley had also rated the share a buy, leading into its second-quarter results. According to my colleague James, the broker had a price target of $19 apiece, which has since been met.
It said the launch of Life360's advertising business could be a catalyst for the business' continued growth.
Meanwhile, the consensus of analyst estimates also rate Life360 shares a buy, according to CommSec.
Foolish takeaway
Life360 shares continue to drift higher in 2024 and are rated positively by analysts covering the stock.
In the last 12 months, the stock is up nearly 123%, outpacing the broader market by more than 108%.
