Life360: We Initiate With AUD 12.15, but We Can't Locate a Moat

We initiate coverage on Life360 with a fair value estimate of AUD 12.15. We don’t believe Life360 has an economic moat. We forecast revenue to grow at a 10-year CAGR of 16% over the next decade and EBIT margins to expand to 24%. Furthermore, we use a weighted cost of capital of 9%. We assign Life360 a Morningstar Uncertainty Rating of Very High and rate its Capital Allocation as Exemplary. At current prices, Life360 screens as materially undervalued.