Life360 (ASX:360) continued to deliver year-on-year margin expansion and strong organic growth in the second quarter, with monthly active users and conversions to Paying Circles both improving, Jefferies said in an Aug. 11 note.

While the company reported a "solid result," several quarter-to-quarter timing items made second-quarter adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) less clean than expected, which contributed to the post-earnings sell-off, the equity research firm said.

The quarterly results benefited from a tariff refund originally expected in the third quarter and the deferral of certain marketing spend into the third quarter, with Jefferies reducing its third-quarter adjusted EBITDA forecast for Life360 by 20% to account for those factors.

The company also reaffirmed its adjusted EBITDA guidance for the full year, implying a margin of 20%, up from 19% in 2025.

"Looking ahead, seasonal back-to-school activity in the US should support stronger [monthly active users] growth in 3Q, while international markets such as Brazil and Mexico appear to be reaching an inflection point, having each surpassed 3% penetration," the investment firm said.

Jefferies maintained a buy rating on Life360 while reducing its price target to AU$29 from AU$30.

The company's shares fell 1% in recent Wednesday trade.