Life360 Inc. (ASX: 360) shares have been having a tough year.

Despite delivering strong growth across key metrics, the location technology company’s shares are down almost 40% since the start of the year.

While that is disappointing, Bell Potter thinks it could be a compelling buying opportunity for investors.

What is the broker saying?

Bell Potter highlights that EBITDA margin expectations are already low for the third quarter of FY 2026 due to increased marketing spend.

The good news is the broker believes Life360 will achieve what is expected and even sees scope for it to exceed expectations. It said:

Life360 has already set the bar relatively low for 3Q2026 by flagging an adjusted EBITDA margin of around 18% which compares to 20% in the pcp and also the previous quarter. The reason for the lower margin is flagged higher marketing spend during the quarter and also the lack of a tariff refund which was received in 2Q2026. 

The likely decrease in margin is, therefore, nothing untoward and looks to be reasonably well anticipated with a VA consensus forecast of c.19%. We ourselves forecast a margin of 18.3% in Q3 and expect our forecast to at least be met if not exceeded. We note that the company guided to a low double digit adjusted EBITDA margin in 1Q2026 – which was later clarified as being close to 10% – and then reported a margin of 12% so the company has some form in guiding to a certain level and then slightly exceeding it.

And while the broker doesn’t expect a guidance upgrade with the results, it believes there is potential for user growth to be on track to achieve guidance in FY 2026. It adds:

Given the anticipated slightly weak adjusted EBITDA margin in Q3 we do not expect any upgrade to the 2026 guidance when the quarterly is released on 10th November and this perhaps partly or largely explains the weakness in the share price since the release of the Q2 result in August. But in the absence of any upgrade there may still be some positives such as MAU growth >5m and/or paying circle growth around 200k in Q3 which would increase the likelihood that at least the low end of the 17-20% MAU growth guidance range can be achieved.

Time to buy Life360 shares?

According to the note, Bell Potter has retained its buy rating on Life360 shares with a trimmed price target of $32.00 (from $33.00).

Based on its current share price of $20.34, this implies potential upside of 57% for investors over the next 12 months.

Commenting on its recommendation, Bell Potter said:

We have reduced the multiple we apply in our EV/EBITDA valuation from 25x to 22.5x due to the continued weakness in software and app stocks both domestically and offshore. We have also increased the WACC we apply in the DCF from 9.5% to 9.7% due to an increase in the risk-free rate from 4.5% to 4.75%. 

The net result is a 6% decrease in our TP to $32.00 which is still a material premium to the share price so we maintain our BUY recommendation. The upcoming quarterly result next month may well prove to be some sort of catalyst, more so because expectations are already low rather than anticipating any sort of material beat or upgrade to guidance.

The post Down almost 40%, are Life360 shares a strong buy in October? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Life360. 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.

Once a week, I like to look at ASIC’s short position report to find out which ASX shares are being targeted by short sellers.

That’s because I believe it is worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, listed below are the 10 most shorted shares on the ASX this week according to ASIC.

The top 10 most shorted ASX shares

• DroneShield Ltd (ASX: DRO) remains the most shorted ASX share despite its short interest easing from 15.2% to 14.5%. Short sellers may still be concerned about the ASIC investigation into the counter-drone technology company’s previous market disclosures and share trading.
• Lotus Resources Ltd (ASX: LOT) has seen its short interest climb from 13.3% to 14%. The uranium producer is working towards steady-state production at Kayelekera, but short sellers may be questioning how quickly it can achieve its targets and at what cost.
• Boss Energy Ltd (ASX: BOE) has short interest of 13.1%, which is largely unchanged week on week. Boss recently revised its long-term development plan for Honeymoon, and short sellers may be sceptical about the production and cost assumptions underpinning its outlook.
• PLS Group Ltd (ASX: PLS) has moved higher up the table, with 12.8% of its shares held short. Despite improving lithium market conditions, short sellers could be betting that the recovery in prices will be difficult to sustain.
• Zip Co Ltd (ASX: ZIP) has seen its short interest ease slightly to 12.6%. Short sellers may still be concerned that elevated interest rates could put pressure on the buy now pay later company’s customers and funding costs, potentially weighing on growth and profitability.
• IperionX Ltd (ASX: IPX) has short interest of 12.5%, down from 12.8%. The titanium producer continues to make technological progress, but short sellers may believe commercial-scale production and the earnings needed to justify its valuation remain some way off.
• Domino’s Pizza Enterprises Ltd (ASX: DMP) has 11.7% of its shares held short, down slightly week on week. Although its restructuring has improved franchisee profitability and cash flow, short sellers appear to doubt whether sales can recover quickly enough to support a sustained earnings turnaround.
• Lynas Rare Earths Ltd (ASX: LYC) has returned to the top ten with short interest of 11.5%. This could reflect concerns over the cost and execution risks associated with its proposed acquisition of Meteoric Resources and the development of its Caldeira rare earths project in Brazil.
• Paladin Energy Ltd (ASX: PDN) has seen its short interest increase from 11% to 11.5%. With the production ramp-up at Langer Heinrich completed, short sellers may now be focusing on uranium price expectations and the costs associated with its future growth projects.
• 4DMedical Ltd (ASX: 4DX) has slipped to tenth place after its short interest fell from 11.9% to 11.1%. Despite increasing commercial adoption of its lung imaging technology, short sellers may believe its valuation is difficult to justify given its relatively modest revenue base.

The post These are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Domino’s Pizza Enterprises. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Domino’s Pizza Enterprises and DroneShield. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Lynas Rare Earths Ltd. The Motley Fool Australia has recommended Domino’s Pizza Enterprises. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Temple & Webster vs Harvey Norman shares

If you’re on the hunt for a value play in the battered Australian retail sector, Temple & Webster Group Ltd (ASX: TPW) and Harvey Norman Holdings Ltd (ASX: HVN) have both taken a hammering lately. But these are very different retailers. Should you bet on the nimble pure-play online player or the diversified retail giant with an eye-catching dividend yield? Here’s how I stack up Temple & Webster vs Harvey Norman shares for value investors, based on the latest available figures.

The case for Temple & Webster

Temple & Webster is Australia’s leading online-only furniture and homewares retailer. Since launching in 2011, its growth story has revolved around shaking up traditional home buying. According to its most recent company profile, the platform stocks over 200,000 products and counts more than 1 million subscribers. While numbers like these signal scale and reach, I’d note they come from profile info, not up-to-the-minute financials.

A few fundamentals catch my eye:

• Price-to-earnings (P/E) ratio is a hefty 123.05.
• No dividend paid – all earnings are being retained for growth or shoring up the business.
• Its year-to-date (YTD) share price return is a bruising -68.8%, showing how hard sentiment has turned against tech and online retail models recently.

This pure digital play grew quickly when lockdowns favoured online shopping, but with normality returning, the harsh downturn in its share price is a reminder that markets can turn fast for disruptors.

The case for Harvey Norman

Harvey Norman is an established household name and one of Australia’s largest retail conglomerates, spanning furniture, electronics, computers, and entertainment goods. Beyond its core stores, it also owns the Domayne and Joyce Mayne brands in Australia. According to its latest public profile, it operates more than 270 outlets across eight countries, plus a significant property portfolio, especially in Australia and New Zealand.

Key fundamentals I notice:

• Much more modest P/E ratio at 9.56.
• Temptingly high ~6.8% dividend yield, fully franked at 100%.
• YTD share price return of -37.7% shows Harvey Norman shares have still been hit hard, but not to the same extent as Temple & Webster.

Harvey Norman also has plenty of runs on the board when it comes to paying dependable, franked dividends. In tough markets, that’s a comfort for value investors.

Valuation comparison

There’s a dramatic contrast between these two on current valuation metrics. Here’s how they stack up side-by-side:

Metric	Temple & Webster	Harvey Norman
Market Cap	$504.7 million	$5.08 billion
P/E Ratio	123.05	9.56
Dividend Yield	0.00%	6.79% (100% franked)
Earnings Per Share (EPS)	$0.035	$0.424
YTD Return	-68.8%	-37.7%

Note: Temple & Webster’s high P/E ratio relative to its modest EPS reveals it’s priced for big expected growth, while Harvey Norman’s low P/E (for its sector) looks more classic value. Both have negative returns this year, but Temple & Webster’s losses have been far steeper. For income seekers, only Harvey Norman is paying a dividend—and a sizeable, franked one.

Recent share price momentum

Comparing recent share price performance up to 7 October:

• Temple & Webster closed at $4.33 on 7 October 2026, up 1.4% for the day but still deeply in the red year-to-date (-68.8%).
• Harvey Norman closed at $4.08 on 7 October 2026, gaining 0.7% for the session and sporting a year-to-date decline of -37.7%.
• Both companies have seen some choppy trading in the last fortnight, but the magnitude of Temple & Webster’s drawdown highlights the sharper fall from grace.

Which is the better buy?

Both of these retailers are bruised, but in my eyes, Harvey Norman stands out as the better bet for value investors right now. The reasons? Its underlying valuation looks far more attractive, with a P/E of 9.56 compared to Temple & Webster’s lofty 123—and it’s paying a substantial fully franked dividend. If I’m looking for value, I want some measure of income and downside protection.

Temple & Webster’s growth story is tantalising, but its sky-high valuation and the absence of a dividend make it more suited to growth investors willing to stomach big swings and back a post-punishment rebound. The negatives? That massive YTD fall signals sentiment could take a while to repair.

For my money, Harvey Norman’s long record of payouts, more defensive business model, and low P/E make it my pick of these two beaten-down retailers for a value-focused investor. If you’re hunting for bargains in a challenged sector, I’d lean toward Harvey Norman for its combination of income, value, and resilience.

The post Temple & Webster vs Harvey Norman: Which beaten-down ASX retailer offers better value? appeared first on The Motley Fool Australia.

More reading

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• Adairs vs Temple & Webster: Which ASX retail stock wins for October?
• Where I’d invest in ASX shares after the recent RBA rate rise
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• Temple & Webster vs Nick Scali: Which furniture share is better?

Motley Fool contributor Laura Stewart 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 Temple & Webster Group. The Motley Fool Australia has positions in and has recommended Harvey Norman. The Motley Fool Australia has recommended Temple & Webster Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial draft. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.