CS Disco’s Growth Potential and Strategic Initiatives Support Buy Rating Despite Financial Challenges

David Hynes, an analyst from Canaccord Genuity, maintained the Buy rating on CS Disco (LAW – Research Report). The associated price target remains the same with $9.00.

David Hynes has given his Buy rating due to a combination of factors that highlight CS Disco’s potential for growth and stability. The company reported solid first-quarter results, surpassing its guidance with a slight increase in both software and total revenue. This performance has led to an upward revision of the full-year outlook, indicating that the business is on track with its plans and the demand environment remains stable.
Furthermore, CS Disco’s market position is strengthened by its differentiated offerings and promising developments in AI capabilities, which are expected to enhance customer engagement and retention. Despite current financial challenges, such as low revenue growth and EBITDA losses, the valuation appears attractive, suggesting limited downside risk. The focus now is on execution and demonstrating tangible growth, with management aiming for EBITDA breakeven by the end of 2026. Overall, the positive trajectory and strategic initiatives support the Buy rating, albeit with a recognition of the need for patience as the company works towards accelerated growth.

In another report released today, Needham also maintained a Buy rating on the stock with a $8.00 price target.

Based on the recent corporate insider activity of 39 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of LAW in relation to earlier this year.