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There’s an S&P/ASX 200 Index (ASX: XJO) share that could achieve very strong returns if one broker is right.
The broker Morgan Stanley has suggested that the Life360 Inc (ASX: 360) share price could have huge upside over the next 12 months. It’s already up 70% this year, as we can see on the chart below.
Exciting Life360 share price target
According to reporting by The Australian, the broker recently increased its price target on the business.
Morgan Stanley has increased its price target on the ASX tech share to $11.50.
A price target is where the broker thinks that the share price is going to be trading at in a year from now. This is just an educated guess, the analysts don’t actually have a crystal ball that tells them what’s happening next for the ASX 200 share.
With this price target of $11.50, the broker is suggesting that the Life360 share price could rise by 37% over the next year. This could significantly outperform the ASX 200 share index benchmark considering its long-term average return has been an average of around 9% to 10% per annum, depending on the time period we look at.
Strong operational growth for the ASX 200 share
The company continues to achieve strong numbers which are revealed in its updates.
In the second quarter of 2023, being the three months to June 2023, it announced quarterly revenue of $70.8 million, a year-over-year increase of 45%, with core Life360 subscription revenue rising 57% to $47.6 million.
The US average revenue per paying circle increased 42% year over year to $140.78, which reflected the benefits of higher pricing.
Annualised monthly revenue (AMR) grew by 43% to $248.7 million, which implies good revenue growth can be reported over the next rolling 12 months.
While it achieved a quarterly loss of $4.4 million, it reported positive adjusted earnings before interest, tax, depreciation and amortisation (EBITDA).
For 2023, it’s expecting growth of more than 50% for core Life360 subscription revenue, operating cash flow of between $5 million to $10 million and positive adjusted EBITDA of between $9 million and $14 million.
