Down 42% this year, is it time to jump into Life360 shares?

There was at least some reprieve for battered investors in Life360 Inc (ASX: 360) shares on Wednesday.

The family safety technology company’s shares jumped 5% to $18.76 after suffering an 11% plunge on Tuesday following another sharp sell-off across the tech sector.

Even after Wednesday’s rebound, the shares are still down 6% for the week, 42% since the start of 2026, and roughly 66% below their all-time high reached in October last year.

So, is this a buying opportunity or a classic value trap?

Broad-based tech sell-off

Life360 operates a family safety and location-sharing platform that allows users to track loved ones, driving behaviour, and emergency alerts in real time. The company generates revenue primarily through subscription services, while also expanding its advertising and data monetisation capabilities.

Life360 shares have been swept up in the broad-based sell-off that has hammered growth shares over the past eight months. Investors have increasingly dumped technology stocks amid fears that artificial intelligence could disrupt or replace parts of many companies’ core services.

At the same time, concerns had been growing that valuations across the tech sector — including Life360 — had become overheated after a huge rally last year. That pressure appeared to intensify again this week, with technology shares broadly weaker on Tuesday.

Strong quarter and guidance

Unfortunately for Life360, the negative sentiment overshadowed what was actually a strong first-quarter FY26 result. The company reported a 38% increase in total revenue for the quarter, driven by a 32% lift in subscription revenue and a 36% increase in core subscription revenue.

Just as importantly, management upgraded its FY26 guidance. Life360 now expects consolidated revenue between US$650 million and US$685 million, up from prior guidance of US$640 million to US$680 million. That represents expected annual growth of between 33% and 40%.

The result suggests customer demand remains strong despite the heavy selling of Life360 shares.

What next for Life360 shares?

Analysts also appear firmly bullish on the outlook for Life360 shares.

According to TradingView data, 13 of 14 analysts currently rate the stock as either a buy or strong buy. The average target price sits at $31.37, implying potential upside of roughly 67% from current levels.

Some analysts are even more optimistic, with the highest target price of $38.71 suggesting the shares could more than double from here.

Following the quarterly update, Citi retained its buy rating and $32.10 price target on Life360 shares. The broker believes recent product improvements could drive stronger engagement and improve monetisation through the company’s advertising business.

Meanwhile, Bell Potter also maintained its buy rating, although it trimmed its price target from $35.50 to $32.50.

Foolish Takeaway

Of course, risks remain. Tech-sector volatility could continue, and investor sentiment toward growth shares remains fragile. Life360 shares also still trade on high growth expectations, which leaves little room for operational missteps.

But with revenue growth accelerating, guidance rising, and analysts overwhelmingly positive, the sharp share price decline could look more like an opportunity than a value trap for long-term investors willing to stomach some volatility.

The post Down 42% this year, is it time to jump into Life360 shares? appeared first on The Motley Fool Australia.

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• Life360 shares rebound 4.5% today: Buy, sell or hold?
• Does Bell Potter think the Life360 share price is dirt cheap?
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Marc Van Dinther has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360. The Motley Fool Australia has positions in and has recommended Life360. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.