CS Disco (LAW) AI Stock Analysis

• Market Cap: $461.19M
• Dividend Yield: N/A
• Average Volume (3M): 139.09K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.00
• Revenue Growth: 6.33%
• EPS Growth: -66.34%
• Country: US
• Employees: 561
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): -0.01
• Shares Outstanding: 62,491,592
• 10 Day Avg. Volume: 186,114
• 30 Day Avg. Volume: 139,092
• PEG Ratio: -0.16
• Price to Book (P/B): 2.04
• Price to Sales (P/S): 2.07
• P/FCF Ratio: -26.06
• Enterprise Value/Market Cap: 0.00
• Enterprise Value/Revenue: 0.00
• Enterprise Value/Gross Profit: 0.00
• Enterprise Value/Ebitda: 0.00
• 1Y Price Target: $9.00
• Price Target Upside: 21.29% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 54 Neutral
• Price Target: $8.50 ▲(14.56% Upside)

The score is held back primarily by weak profitability and negative operating/free cash flow despite strong gross margins and low leverage. Technical trends are moderately positive with price above key moving averages and a positive MACD. The earnings call adds support via improving adjusted EBITDA and solid cash/no-debt position, but uncertainty remains due to negative cash flow and contingent revenue contribution.

Positive Factors

Revenue Growth

The strong year-over-year growth in software revenue indicates robust demand and effective market penetration, supporting long-term business expansion.

AI Integration

Successful AI integration enhances product offerings, improving customer satisfaction and positioning the company as a leader in legal tech innovation.

Leadership Change

The appointment of an experienced CFO with a background in SaaS and AI strengthens financial leadership, potentially improving strategic financial management.

Negative Factors

Negative Cash Flow

Persistent negative cash flow indicates liquidity challenges, which may hinder the company's ability to invest in growth and manage operational expenses.

Profitability Issues

Weak profitability metrics suggest ongoing cost management issues, which could impact long-term financial health and shareholder value.

Contingent Revenue Dependency

Dependence on contingent revenue raises concerns about revenue stability and predictability, potentially affecting future financial performance.

CS Disco Business Overview & Revenue Model

Company Description

CS Disco, Inc., a legal technology company, provides cloud-native and artificial intelligence-powered legal solutions for ediscovery, legal document review, and case management for enterprises, law firms, legal services providers, and governments. The company offers DISCO Ediscovery, a solution that automates ediscovery process and saves legal departments from manual tasks associated with collecting, processing, enriching, searching, reviewing, analyzing, producing, and using enterprise data that is at issue in legal matters. It also provides DISCO Review, an AI-powered document review solution, which consistently delivers legal document reviews; and DISCO Case Builder, a solution that allows legal professionals to collaborate with teams to build a compelling case by offering a single place to search, organize, and review witness testimony and other legal data. The company's tools are used in various legal matters comprising litigation, investigation, compliance, and diligence. CS Disco, Inc. was founded in 2012 and is headquartered in Austin, Texas.

How the Company Makes Money

CS Disco generates revenue primarily through a subscription-based model, offering its eDiscovery platform and associated services on a recurring basis. Key revenue streams include monthly or annual subscriptions for access to its cloud software, which is priced based on the volume of data processed or the number of users. Additionally, the company may earn revenue through professional services, such as training, implementation support, and consulting for firms looking to optimize their use of the platform. Significant partnerships with legal technology vendors and integration with other legal software systems also contribute to its earnings by expanding its market reach and enhancing the value of its offerings.

CS Disco Financial Statement Overview

Summary

CS Disco shows revenue growth but struggles with profitability and cash flow. The company has a strong equity position and low leverage but needs to address operational inefficiencies to improve financial health.

Income Statement

CS Disco shows a consistent revenue growth trend, with a TTM growth rate of 3.14%. However, profitability remains a challenge as indicated by negative net profit margins (-38.21%) and EBIT margins (-40.04%). The gross profit margin is strong at 74.02%, but the company needs to improve its cost management to achieve profitability.

Balance Sheet

The company maintains a low debt-to-equity ratio of 0.06, indicating conservative leverage. However, the return on equity is negative (-38.04%), reflecting ongoing losses. The equity ratio stands at 74.73%, suggesting a solid equity base relative to total assets, but profitability issues persist.

Cash Flow

CS Disco's cash flow situation is concerning, with negative operating cash flow and free cash flow. The free cash flow to net income ratio is positive at 1.19, indicating some efficiency in cash usage, but overall cash flow growth is negative, highlighting liquidity challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	152.68M	144.84M	138.09M	135.19M	114.34M	68.44M
Gross Profit	113.95M	107.43M	103.14M	101.03M	83.24M	47.99M
EBITDA	-57.84M	-50.96M	-37.55M	-67.13M	-20.99M	-20.72M
Net Income	-61.07M	-55.77M	-42.15M	-70.77M	-24.34M	-22.87M
Balance Sheet
Total Assets	174.76M	180.32M	231.55M	256.32M	287.40M	79.11M
Cash, Cash Equivalents and Short-Term Investments	113.49M	129.13M	159.55M	203.24M	255.48M	58.57M
Total Debt	7.60M	9.30M	9.16M	10.91M	989.00K	2.12M
Total Liabilities	44.13M	32.81M	31.21M	32.69M	18.72M	174.03M
Stockholders Equity	130.63M	147.51M	200.34M	223.64M	268.68M	-94.92M
Cash Flow
Free Cash Flow	-16.71M	-11.53M	-44.39M	-50.39M	-24.75M	-24.62M
Operating Cash Flow	-13.61M	-8.75M	-25.53M	-46.01M	-21.64M	-22.71M
Investing Cash Flow	-34.21M	-78.03M	-20.04M	-9.69M	-3.11M	-1.90M
Financing Cash Flow	71.00K	-20.00M	1.87M	3.47M	221.66M	59.96M

CS Disco Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 7.42
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LAW, the sentiment is Neutral. The current price of 7.42 is below the 20-day moving average (MA) of 8.06, above the 50-day MA of 7.37, and above the 200-day MA of 5.36, indicating a neutral trend. The MACD of -0.01 indicates Positive momentum. The RSI at 42.72 is Neutral, neither overbought nor oversold. The STOCH value of 27.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for LAW.

CS Disco Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DSP	65 Neutral	$711.74M	429.55	4.45%	―	22.97%	49.49%
SMRT	62 Neutral	$342.45M	-4.98	-25.48%	―	-24.30%	-181.62%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
ONTF	59 Neutral	$338.00M	-10.78	-20.20%	―	-6.23%	28.57%
PUBM	59 Neutral	$388.49M	-46.91	-2.85%	―	-0.68%	-146.14%
LAW	54 Neutral	$461.19M	-7.37	-41.00%	―	6.33%	-66.34%
FRGE	48 Neutral	$618.16M	-9.07	-28.65%	―	16.40%	22.80%

CS Disco Corporate Events

CS Disco Names Aaron Barfoot as New Chief Financial Officer

On December 18, 2025, CS Disco’s board appointed Aaron Barfoot as Executive Vice President, Chief Financial Officer, principal financial officer and principal accounting officer, effective January 12, 2026, replacing current CFO Michael Lafair, whose tenure will now extend through January 11, 2026. Barfoot, previously CFO at digital identity and fraud-prevention firms Socure and Forter, will receive a $456,000 base salary, a target annual bonus equal to 60% of salary, a $2 million restricted stock unit grant vesting over four years, and a $100,000 signing bonus subject to partial repayment under certain early departure scenarios; his employment agreement also provides for differentiated severance and equity-acceleration protections in change-in-control and other termination situations, underscoring CS Disco’s effort to attract experienced financial leadership and ensure continuity through potential strategic transactions.

The most recent analyst rating on (LAW) stock is a Hold with a $8.50 price target. To see the full list of analyst forecasts on CS Disco stock, see the LAW Stock Forecast page.