Life360 Inc (ASX: 360) shares closed 2.99% higher on Tuesday afternoon. While the uptick is good news for investors, the stock has a while to go before it recovers losses made over the past four months.
For the year to date, Life360 shares have declined 18.33%. They’re also 52.18% below the all-time high of $55.44 achieved in October last year.
What happened to Life360 shares?
The US-based software development company took the tech industry by storm last year. The dual-listed (on the Nasdaq and the ASX) company was earmarked as an unstoppable ASX growth share after the launch of its new GPS pet-tracking feature.
There was never any real price sensitive news out of the tech company to explain the dramatic investor sell-off. Rather, it looks like the decline is a combination of investors selling up to take profit off the table after a period of strong price growth, combined with overall sector wide weakness across the tech sector.
Earlier this month there was concern that artificial intelligence could disrupt traditional platforms and software models. This damped investor sentiment and caused a further pullpack in the share price.
This year’s headwinds come off the back of a sharp share price correction across the tech sector in late 2025.Â
The company delivered a standout quarterly update last month. The result beat expectations and caused a share price surge of nearly 30%.
Life360 reported strong user growth, with monthly active users (MAU) reaching 95.8 million. That marks the highest Q4 MAU level in the company’s history and represents an intake of an additional 16.2 million users over calendar year 2025.
But it wasn’t enough to keep confidence high and the uptick was short-lived.
What’s ahead for Life360 in 2026?
Life360 said it expects to see strong user acquisition and monetisation in both its core US and fast-growing international markets this year.
Following its new pet-related software, the business plans to turn its attention to an elderly-focused solution.
Some even think the user growth could accelerate in 2026 if engagement remains strong.
In short, Life360 is well positioned for growth in 2026. If that eventuates, then the current share price is a bargain for investors who want to get in on the stock. Especially ahead of the next uplift.
Data shows that analysts are mostly bullish on the outlook for the tech stock. Out of 13 analysts, 10 have a buy or strong buy rating on the shares. The maximum price target is $49.68 which implies a potential 87.41% upside for investors at the time of writing.
The post Life360 shares drop 50% from their peak: Buy, sell or hold? appeared first on The Motley Fool Australia.
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Motley Fool contributor Samantha Menzies 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.