Why Life360 Stock Is Plunging Lower This Week
Life360 stock may have dipped this week, but its operations are still firing on all cylinders.
Overview
Shares of leading "family connection and social safety app" Life360 (NASDAQ: LIF) are down 18% this week as of Friday at noon ET after the company reported second-quarter earnings on Monday. While Life360 beat analysts' Q2 expectations, shares plummeted regardless after management didn't raise full-year guidance. Ultimately, it was an excellent quarter for the company, but its lofty valuation demanded perfection.
During Q2:
Details
Simply put, these are the type of market reactions to earnings that don't seem to make sense at first blush. However, with Life360 still trading at 45 times free cash flow -- and even higher once stock-based compensation is considered -- the stock was priced to deliver near-perfection, and the lack of a full-year guidance raise seemed to disappoint the market.
Source
Originally published at www.fool.com.