LegalZoom.com's (LZ) new collaborations with Perplexity and OpenAI can boost demand for the company as artificial intelligence usage significantly raises penetration of legal services online, BofA Securities said in a note Friday.
The brokerage said that while the company still faces threats from AI, large language models alone cannot handle issues like confidentiality and client privilege, creating a necessity for a legal service provider like LegalZoom.com.
The company's partnerships with Perplexity and OpenAI create "as much opportunity as threat near-term," BofA said.
The brokerage raised the company's rating to buy from underperform, citing the company's new partnerships and shift towards subscriptions. It also increased the stock's price target to $12 from $8.
The brokerage said it expects the company to sustain double-digit subscription revenue well into 2026, as revenue growth has significantly exceeded expectations.
Price: 11.75, Change: +3.38, Percent Change: +40.32
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