Sell alert! Why this expert is calling time on Life360 and Xero shares

It’s safe to say that Life360 Inc (ASX: 360) and Xero Ltd (ASX: XRO) shares have had a year to forget.

As have their stockholders.

In late morning trade on Tuesday, the S&P/ASX 200 Index (ASX: XJO) is down 0.1%, putting the benchmark Aussie stock market index down 2.1% in 12 months.

As for Life360, shares in the ASX 200 location-sharing software developer are down 1.9% today, trading at $18.95 each. This sees the Life360 share price down a sharp 64% since this time last year.

And Xero shares have had a similar bear run. At the time of writing, shares in the business and accounting software provider are up 1.5%, changing hands for $58.55 apiece. Despite the welcome intraday lift, shares remain down a painful 63% over the past 12 months.

What’s been pressuring the ASX 200 tech stocks?

Life360 and Xero shares have both faced similar headwinds.

First, there have been ongoing concerns that rapidly advancing AI systems might cheaply replace a lot of the services that Software as a Service (SaaS) stocks currently offer. Or the so-called ‘SaaSpocalypse’.

ASX tech stocks have also come under pressure as major economies across the globe, including the United States and Australia, ratchet up interest rates.

Growth-oriented shares like Xero and Life360 are generally priced with higher future earnings in mind. And as interest rates go up, so too does the present cost of investing in those future earnings.

And looking ahead, Fairmont Equities’ Michael Gable believes both these ASX 200 tech shares could face further headwinds in the months ahead (courtesy of The Bull).

Time to exit Xero shares?

“Xero is an accounting software provider,” Gable said. “In my view, potentially increasing bond yields and interest rates will continue to be a headwind for technology stocks, such as XRO.”

Summarising his sell recommendation on Xero shares, Gable said:

Fiscal year 2026 operating revenue increased 31 per cent on the prior corresponding period. However, net profit after tax fell 27 per cent. The gross margin declined from 89 per cent to 83.9 per cent.

From a charting perspective, selling pressure follows share price rallies, so the downtrend may not yet be over at this point.

Should I sell Life360 shares today?

Atop his bearish outlook on Xero shares, Gable also issued a sell recommendation on Life360 shares.

“This information technology company provides a mobile networking safety app for families,” he noted.

“The company posted a 38 per cent increase in revenue in the second quarter of 2026 when compared to the prior corresponding period. Total subscription revenue was up 31 per cent,” Gable added.

Explaining his sell recommendation on Life360 shares, Gable concluded:

However, the share price has fallen from $29.48 on August 10 to trade at $19.44 on September 24. We believe the business is vulnerable to increasing competition.

Any earnings disappointments moving forward may further pressure the share price. Investors may want to consider cashing in some gains.

The post Sell alert! Why this expert is calling time on Life360 and Xero shares appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben 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 and Xero. The Motley Fool Australia has positions in and has recommended Life360 and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.