DCF Studio

    360.AX · ASX · Technology

    Life360, Inc.

    Also onConsensus Drift

    Implied value per share

    AUD -1.80

    Market price

    AUD 19.02

    Implied upside

    -109.5%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · USD model at 1.4042

    AdjustedReports in USD, trades in AUD. Modelled in USD, converted at the end.
    AdjustedReported capital expenditure averages just 0.99% of revenue, which is too low to be the company's real investment - property trusts and similar structures invest through lines that are not reported as capex. Capex has been set to 3.21% of revenue so the forecast is not handed free growth. Override it if the reported figure is right.
    AdjustedFree cashflow is negative in at least one forecast year, so terminal value carries most of the valuation.

    Current EV/EBITDA of 136.7x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    AUD -1.80-109.5%
    Exit multiple
    AUD -12.69-166.7%
    Market price
    AUD 19.02

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    -216800734-1084003670FY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 631.2mUSD 813.9mUSD 1.0bnUSD 1.4bnUSD 1.7bn+28.9%
    EBITUSD -78.1mUSD -100.7mUSD -129.8mUSD -167.4mUSD -215.8m-28.9%
    NOPATUSD -54.6mUSD -70.5mUSD -90.9mUSD -117.1mUSD -151.1m-28.9%
    Add depreciation & amortisationUSD 20.2mUSD 26.1mUSD 33.6mUSD 43.4mUSD 55.9m+28.9%
    Less capital expenditureUSD -20.2mUSD -26.1mUSD -33.6mUSD -43.4mUSD -55.9m+28.9%
    Less increase in working capitalUSD -23.8mUSD -30.7mUSD -39.5mUSD -51.0mUSD -65.7m+28.9%
    Free cashflow to firmUSD -78.4mUSD -101.1mUSD -130.4mUSD -168.1mUSD -216.8m-28.9%
    Discount factor0.94830.85280.76690.68960.6202-
    Present valueUSD -74.4mUSD -86.2mUSD -100.0mUSD -116.0mUSD -134.5m-16.0%
    Present Value Of The ForecastUSD -511.0m

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.35%Australian Government 10-year (RBA F2)
    Equity risk premium6.00%Market assumption
    Beta1.043Reported 1.064, pulled toward 1.0 (Blume)
    Cost of equity11.61%Risk-free + beta x equity risk premium
    Cost of debt7.35%Assumed: risk-free + 2bp (interest expense not reported)
    Market capitalisationUSD 4.6bn93.7% of capital
    Total debtUSD 310.4m6.3% of capital, book value as a proxy
    Tax rate30.0%Effective, capped at statutory
    WACC11.20%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD -1.28

    0% of EV

    Terminal value, undiscounted
    USD 0.00
    Terminal value, discounted
    USD 0.00
    Enterprise value
    USD -511.0m
    Less net debt
    USD -183.9m
    Equity value
    USD -327.1m

    Exit at 20.0x EBITDA

    Value per shareUSD -9.04

    80% of EV

    Terminal value, undiscounted
    USD -3.2bn
    Terminal value, discounted
    USD -2.0bn
    Enterprise value
    USD -2.5bn
    Less net debt
    USD -183.9m
    Equity value
    USD -2.3bn

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    9.20%-1.38-1.38-1.38-1.38-1.38
    10.20%-1.33-1.33-1.33-1.33-1.33
    11.20%-1.28-1.28-1.28-1.28-1.28
    12.20%-1.23-1.23-1.23-1.23-1.23
    13.20%-1.18-1.18-1.18-1.18-1.18

    Outlined: this model. Green text: above today's price of 13.55. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    EBIT margin-12.4%35.0%+47.3pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.