DA Davidson cuts Life360 stock price target on softer user growth

DA Davidson has reduced its price target on Life360's stock to $40 from $47, maintaining a Neutral rating on the company. The new target is below Life360's current trading price of $44.28, which has fallen 57% over the past year and nears its 52-week low of $37.01. The firm's revised model shows third-quarter data as 1.5% below analyst consensus for September 12.

DA Davidson adjusted its model to reflect 16.6% year-over-year growth, down from the previous 17.3% and current consensus of 17.2%. The reduction in the price target is attributed to softer user growth in international markets, where the adoption rate is slower than expected. Many countries with weak driving cultures are not adopting Life360 as quickly as anticipated, and traditional penetration tipping points observed in other countries are not materializing as projected for 2026.

Life360 needs to adapt its application for lower-end and older devices in these international markets, as new features must be designed to operate on such devices and older software. Despite these near-term challenges, Life360 maintains a strong financial health score, with analysts predicting profitability this year. The company has reported a 38% year-over-year revenue increase to $159 million in the second quarter and a 53% increase in adjusted EBITDA to $31.1 million.

Life360 has over 102 million monthly active users, demonstrating significant user growth. In response to these results, DA Davidson raised its price target for Life360 from $42 to $47 while keeping a Neutral rating on the stock.