With the business potentially at an important milestone, we thought we'd take a closer look at Life360, Inc.'s (ASX:360) future prospects. Life360, Inc. operates a technology platform to locate people, pets, and things in North America, Europe, the Middle East, Africa, and internationally. The company’s loss has recently broadened since it announced a US$28m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$30m, moving it further away from breakeven. As path to profitability is the topic on Life360's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Life360

Life360 is bordering on breakeven, according to the 14 Australian Software analysts. They expect the company to post a final loss in 2024, before turning a profit of US$6.4m in 2025. So, the company is predicted to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 68% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Life360 given that this is a high-level summary, however, bear in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. Life360 currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Life360 to cover in one brief article, but the key fundamentals for the company can all be found in one place – Life360's company page on Simply Wall St. We've also compiled a list of pertinent factors you should further examine:

1. Valuation: What is Life360 worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Life360 is currently mispriced by the market.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Life360’s board and the CEO’s background.

3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.