Analyst Scott Berg of Needham maintained a Buy rating on CS Disco, retaining the price target of $8.00.
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Scott Berg has given his Buy rating due to a combination of factors that highlight CS Disco’s potential for growth and improved financial performance. The company has demonstrated a notable increase in software revenue, marking a significant turnaround with an 11.7% year-over-year growth. This positive trend is attributed to the new enterprise strategy that focuses on large matters, which is expected to continue driving revenue growth as these matters accumulate.
Furthermore, the management’s confidence is reflected in the raised guidance for FY25, projecting a 9% increase in software revenue with expectations of double-digit growth in the latter quarters. Although there are challenges in the services revenue segment, particularly with Auto Review, there is optimism about its recovery. Overall, the anticipation of a return to double-digit growth and margin expansion by FY26 underpins the positive outlook for CS Disco, justifying the Buy rating.
Berg covers the Technology sector, focusing on stocks such as PROS Holdings, Amplitude, and Dayforce Inc. According to TipRanks, Berg has an average return of -6.2% and a 36.50% success rate on recommended stocks.