Life360, Inc. (LIF) stock intrinsic value fair value estimate & owner earnings analysis

Business. Life360 runs a family-safety app (location sharing, driving and crash alerts, emergency assistance) sold mainly as a subscription, plus Tile trackers. At the end of 2025 it had about 95.8 million monthly users and 2.8 million paying Circles (paid family groups), up 20% and 26% on the year. 2025 revenue was $489.5 million, up from $371.5 million in 2024 and $304.5 million in 2023. About 85% of revenue is booked in the United States, and about 7% comes from selling data insights to partners. How we measure earnings. We start from operating cash flow, remove the swings from receivables, payables and deferred revenue, and then deduct stock compensation as a real cost ($55.5 million in 2025). Capital spending is tiny (about $1.8 million), so it barely matters. On this basis the business lost money per share in 2020 to 2023, roughly broke even in 2024 (about -$0.02) and earned about $0.52 per share ($44.7 million) in 2025. That flip is recent and short, so we use 2025 as the earnings level rather than a median of the loss-making years, which describe a much smaller company without today's pricing and scale. The first half of 2026 supports the level: earnings on the same basis were about $8.7 million versus about $0.8 million in the first half of 2025, though stock compensation rose sharply (about $39 million versus $25 million), and this seasonally weaker half says little on its own. Growth check. Earnings per share moved from about -$0.02 to $0.52 in 2025, so a percentage growth rate is not meaningful. For year 1 we assume 15% growth, well below revenue growth of 32% in 2025, because stock compensation is growing faster than revenue and we credit only what the subscriber base already locks in. Paying Circles grew 26% in 2025, and most are billed on annual plans, so 2026 revenue from the existing base is largely already in place. Growth that depends on new products, new countries, hardware or price increases beyond those already realised is left out. Base case: $10.89 per share. Growth of 15% tapering by one point a year to 6% in year 10, from a $0.52 starting level. From year 5 we deduct 20% of earnings for cash taxes: the company holds about $339.9 million of federal tax-loss carryforwards that currently shield income, and that shield will run out. After year 10 we hold earnings flat for ten more years, reflecting the subscription base that renews and the free member base that feeds it, then value nothing beyond that. Bear case: $5.15 per share. Growth of 6% fading to zero by year 7, full taxes from year 4, and after year 10 earnings shrink 8% a year. Named risks: the apps are distributed almost exclusively through the Apple App Store and Google Play, so changes to their terms or fees hit directly; roughly 7% of revenue comes from selling data insights to partners, which could be lost if partners end agreements or regulation tightens; 85% of revenue is in the United States; and the company issued $320 million of 0.00% convertible notes due June 2030, which must be repaid or converted. The notes carry no cash interest so they do not reduce earnings, and we do not deduct them from value; the risk is reflected in the weaker path. Bull case: $15.16 per share. Growth of 22% fading to 4% over ten years, which extends recent paying-circle growth and pricing gains only modestly, with taxes from year 5 and earnings held flat for fifteen years after year 10 because annual subscriptions renew. What would make this wrong. Rising stock compensation could absorb more of cash flow than assumed, subscriber growth could stall in the United States where most sales occur, or the platform owners could change terms. Also, the 10-K does not disclose a cash tax figure we could verify against the 20% haircut, which is our estimate. On the business and its valuation, the shares appear worth roughly $5 to $15, with a central estimate near $11. The margin-of-safety price is $6.50, a large discount to the central estimate, because the profitable record is only about a year long.