Life360 (Life360) Predictability Rank

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What is Life360 Predictability Rank?

Not Rated

Warren Buffett said many times that the companies he likes are:

1. Simple businesses that he understands
2. that have predictable and proven earnings and
3. with economic moat
4. those can be bought at a reasonable price.

It is hard to quantify "simple businesses that he (Buffett) understands", so we will focus on the other three characteristics instead. In GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank, we will show that the businesses that have predictable and proven earnings are usually also simple businesses that an average person could understand.

GuruFocus conducted a back test study of Warren Buffett's strategy of "buying good companies at fair prices" for the years from 1998-2008.

Life360 Predictability Rank Calculation

In our database there are 2403 stocks that have been traded from Jan. 2, 1998 to Aug. 31, 2008. We have the complete 10-year financial data and trading prices of these companies for this period. We rank the predictability of these companies based on the consistency of their revenue per share and EBITDA (earning before interest, tax, depreciation and amortization) per share over the past ten fiscal years, and study the correlation between the stock performances and the predictability of the business.

Our study may be subject to these biases and assumptions:

Dividend yields are not counted for investment returns
Effects of price changes due to spin-offs may not be fully adjusted
Study is subjected to survivorship bias due to de-listing, bankruptcy, LBO, M&A, etc.

The correlation between business predictability and investment returns of a company is showed below.

Correlation Between Business Predictability and Investment Returns

	Predictables	Non-Predictable	All stocks
Total Number of stocks	570	1833	2403
Total Lost Money	61	830	891
Total Lost More Than 50%	18	412	430
Total Lost More Than 90%	4	86	90
Average Gain	260.6%	100.0%	138.1%
Median Gain	150.0%	13.0%	39.0%
Maximum Gain	2852.0%	11483.0%	11483.0%
Maximum Loss	-100.0%	-100.0%	-100.0%
Annualized Average Gain	12.7%	6.7%	8.4%
Annualized Median Gain	8.9%	1.1%	3.1%

For the 570 predictable companies, we have seen strong correlation between the predictability of businesses and the stock performances over the past 10 years, regardless of the valuation of business at 1998. Accordingly, we have ranked the business predictability from 5-star to 1-star, as shown in this table.

Predictability Rank	5-Star	4.5-Star	4-Star	3.5-Star	3-Star	2.5-Star	2-Star	1-Star (non-predictable)	Average among all
% Out of All 2403 Stocks	3.3%	2.9%	3.7%	3.3%	3.3%	3.7%	3.3%	76.3%	100%
% that are in Loss (10y)	3%	10%	8%	9%	11%	18%	16%	45%	37%
Average Gain (10y)	364.6%	330.9%	278.0%	235.1%	243.5%	227.8%	154.8%	100.0%	138.1%
Median Gain (10y)	238.5%	193.5%	171.0%	159.0%	132.5%	113.5%	87.0%	13.0%	39.0%
Maximum Gainer	2228.0%	2547.0%	2452.0%	2852.0%	2432.0%	1892.0%	1807.0%	11483.0%	11483.0%
Maximum Loser	-82.0%	-53.0%	-67.0%	-100.0%	-83.0%	-100.0%	-78.0%	-100.0%	-100.0%
Annualized Average Gain	15.4%	14.6%	13.2%	12.0%	12.2%	11.7%	9.1%	6.7%	8.4%
Annualized Median Gain	12.1%	10.6%	9.8%	9.3%	8.2%	7.3%	6.0%	1.1%	3.1%

For detailed information about each predictability rank, please go to GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank

Life360 Predictability Rank Related Terms

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Life360 (Life360) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » Life360 Inc (OTCPK:LIFX) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

L36:Germany 360:Australia

Address

1900 South Norfolk Street, Suite 310, San Mateo, CA, USA, 94403

Website

https://www.life360.com

Life360 is the world's largest family-focused social network, with over 50 million monthly active users. Security-conscious families use the Life360 app to track each other's whereabouts and to track the location of their pets and personal belongings. Life360 also offers a suite of additional security features, such as driver safety monitoring, roadside assistance, and emergency dispatching. In the U.S., the Life360 app regularly ranks in the top 10 most popular social-networking apps and in the top 25 across all apps in terms of daily active users.

Executives

Susan L. Stick	officer: General Counsel	1900 SOUTH NORFOLK STREET, SUITE 310, SAN MATEO CA 94403
Samir Kapoor	officer: Chief Technology Officer	C/O LIFE360, INC., 1900 SOUTH NORFOLK STREET, SUITE 310, SAN MATEO CA 94403
Lauren Antonoff	officer: Chief Operating Officer	C/O MOMENTIVE GLOBAL INC., ONE CURIOSITY WAY, SAN MATEO CA 94403
John Philip Coghlan	director	120 KEARNY STREET, SAN FRANCISCO CA 94108
Charles J. Prober	director, other: CEO of Tile, Inc.	C/O SCIPLAY CORPORATION, 6601 BERMUDA ROAD, LAS VEGAS NV 89119
Randi Zuckerberg	director	394 PACIFIC AVE., SUITE 2, SAN FRANCISCO CA 94111
Chris Hulls	director, officer: Chief Executive Officer	C/O LIFE360, INC., 1900 SOUTH NORFOLK STREET, SUITE 310, SAN MATEO CA 94403
Carrie Cronkey	officer: Chief Marketing Officer	C/O LIFE360, INC., 1900 SOUTH NORFOLK STREET, SUITE 310, SAN MATEO CA 94403
Kirsten Daru	officer: Chief Privacy Officer, GC, Sec	C/O LIFE360, INC., 539 BRYANT STREET, SUITE 402, SAN FRANCISCO CA 94107
Mark Goines	director	C/O LIFE360, INC., 1900 SOUTH NORFOLK STREET, SUITE 310, SAN MATEO CA 94403
Alex Haro	director	C/O LIFE360, INC., 539 BRYANT STREET, SUITE 402, SAN FRANCISCO CA 94107
Brit Morin	director	C/O LIFE360, INC., 539 BRYANT STREET, SUITE 402, SAN FRANCISCO CA 94107
James Synge	director	C/O LIFE360, INC., 539 BRYANT STREET, SUITE 402, SAN FRANCISCO CA 94107
David Wiadrowski	director	C/O LIFE360, INC., 539 BRYANT STREET, SUITE 402, SAN FRANCISCO CA 94107
David William Rice	officer: Chief Operating Officer	C/O LIFE360, INC., 539 BRYANT STREET, SUITE 402, SAN FRANCISCO CA 94107