Financial institution of America see vital upside forward of sizzling AI inventory LegalZoom . Analyst Michael McGovern upgraded the web authorized providers supplier from underperform to purchase and raised his value goal by $4 to $12. His new goal on the inventory — which already is up 11.5% this yr — suggests shares can soar 43%. Administration “has executed a considerable portion of the shift towards Subscriptions, whereas additionally including strategic AI collaborations,” McGovern mentioned in a Friday be aware as a high cause for his improve. McGovern highlighted LegalZoom’s new partnerships with searchbots Perplexity and OpenAI’s ChatGPT agent as strikes that “create a brand new funnel of throughput” as AI utilization concurrently accelerates using authorized providers on-line. The collaborations additionally underscore the shifting position of AI as a longer-term alternative for LegalZoom, despite the fact that an AI-native competitor might nonetheless be a menace to its enterprise, he mentioned. One other sturdy catalyst for LegalZoom’s progress is its alternative to see accelerating subscription progress, which has been partially as a result of bundling and powerful renewal charges. “LZ can seemingly maintain double-digit subscription income properly into subsequent yr, as income progress has considerably exceeded our expectations,” McGovern mentioned. “ARPU can even develop into a much bigger contributor to Subscription Income progress perform subsequent yr.” LZ 1Y mountain LegalZoom inventory over the previous yr. BofA stays constructive on the inventory story transferring forward, and believes LegalZoom can see a number of growth given its already discounted a number of and stable free money move trajectory.