Want to see LAW full AI Analyst Report?
Top Page
CS Disco
(NYSE:LAW)
Select Model
Select Model
Rating:49Neutral
Price Target:
$4.00
▲(13.64% Upside)
Action:Reiterated
Date:08/05/26
The score is held down primarily by persistent losses and ongoing cash burn despite strong gross margins and a low-debt balance sheet. Technicals show modest near-term improvement but still lag the long-term trend. The earnings call provides some support via raised revenue guidance and a stated path toward adjusted EBITDA positivity, though profitability remains negative in the near term.
Positive Factors
High gross margins
DISCO's ~75% gross margin reflects SaaS-like economics and durable pricing power in eDiscovery. High gross profitability gives room to invest in R&D and sales while retaining the potential for operating leverage as ARR and matter volumes scale over multiple quarters.
Negative Factors
Persistent cash burn
Ongoing negative operating and free cash flow signals DISCO is still consuming capital to fund growth. If operating losses persist, cash reserves will shrink and constrain strategic investments or force fundraising, making runway and liquidity a multi‑quarter structural risk.
Read all positive and negative factors
Positive Factors
Negative Factors
High gross margins
DISCO's ~75% gross margin reflects SaaS-like economics and durable pricing power in eDiscovery. High gross profitability gives room to invest in R&D and sales while retaining the potential for operating leverage as ARR and matter volumes scale over multiple quarters.
Read all positive factors
CS Disco (LAW) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$250.12M
Dividend YieldN/A
Average Volume (3M)236.50K
Price to Earnings (P/E)―
Beta (1Y)1.11
Revenue Growth11.07%
EPS Growth27.51%
CountryUS
Employees577
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)-0.64
Shares Outstanding64,134,410
10 Day Avg. Volume234,825
30 Day Avg. Volume236,500
Financial Highlights & Ratios
PEG Ratio0.48
Price to Book (P/B)3.74
Price to Sales (P/S)3.05
P/FCF Ratio-26.62
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda>-0.01
Forecast
1Y Price Target
$8.00Price Target Upside127.27% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)-0.17
Revenue Forecast (FY)$176.07M
CS Disco Business Overview & Revenue Model
Company Description
CS Disco, Inc. is a legal technology innovator that leverages cloud-native infrastructure and artificial intelligence to deliver advanced solutions. These solutions support electronic discovery, legal document analysis, and comprehensive case mana...
How the Company Makes Money
CS Disco primarily makes money by charging customers for access to and usage of its cloud-based legal technology offerings and related services. Revenue is generated through (1) subscription and/or term-based software arrangements for its platform...
CS Disco Earnings Call Summary
Earnings Call Date:Aug 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 05, 2026
Earnings Call Sentiment Positive
The call balanced solid operational and strategic progress—13% revenue growth, strong DISCO platform adoption (hitting an internal year-end run rate early), AI revenue more than tripling, record Auto Review usage, raised full-year revenue guidance, and a healthy cash position—against continued near-term profitability pressure (Q2 adjusted EBITDA negative, full-year adjusted EBITDA still guided negative) and concentration and execution risks. The company emphasized a multi-quarter investment phase (Unified Litigation Solution pilot and continued R&D) while signaling an expected return to adjusted EBITDA positivity in Q4, indicating confidence in the path to profitability.Positive Updates
Revenue Growth
Total revenue of $43.1M, up 13% year-over-year; software revenue $36.8M, up 13% YoY; services revenue $6.3M, up 18% YoY.
Negative Updates
Adjusted EBITDA and Profitability Still Negative
Adjusted EBITDA was negative $3.4M in Q2 (adjusted EBITDA margin -8% vs -7% prior year). Full-year adjusted EBITDA guidance remains negative ($-8M to $-5M) with the company expecting to reach adjusted EBITDA positivity in Q4 only.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue Growth
Total revenue of $43.1M, up 13% year-over-year; software revenue $36.8M, up 13% YoY; services revenue $6.3M, up 18% YoY.
Read all positive updates
Company Guidance
DISCO guided Q3 FY2026 total revenue of $43.75M–$45.75M, software revenue of $38.1M–$39.1M, and adjusted EBITDA of negative $1.75M to negative $0.25M; for FY2026 it raised full‑year guidance to total revenue $172M–$179M, software revenue $147.5M–$152.5M, and updated full‑year adjusted EBITDA of negative $8M to negative $5M, while reiterating an expectation to be adjusted‑EBITDA‑positive in Q4. For context, Q2 actuals were $43.1M total revenue ($36.8M software, $6.3M services), adjusted EBITDA of negative $3.4M, net loss $3.6M ($0.06/share), gross margin 76%, operating cash flow negative $1.1M, and cash & short‑term investments of $101.4M with no debt; the company also reported 354 customers spending >$100K LTM (representing $128M or 77% of LTM revenue, +15% YoY), said revenue attributable to generative/agentic AI more than tripled YoY, Auto Review set a new revenue record, and noted DISCO platform hit its Dec‑2026 year‑end run rate by June—while cautioning potential short‑term revenue impact from lower ingest fees that should be offset over time by platform fees and larger, longer matters.CS Disco Financial Statement Overview
Summary
Income Statement
38
Negative
Balance Sheet
72
Positive
Cash Flow
28
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 167.12M | 156.85M | 144.84M | 138.09M | 135.19M | 114.34M |
| Gross Profit | 125.05M | 117.42M | 107.43M | 103.14M | 101.03M | 83.24M |
| EBITDA | -34.71M | -43.41M | -50.96M | -37.55M | -67.13M | -20.99M |
| Net Income | -40.44M | -44.37M | -55.77M | -42.15M | -70.77M | -24.34M |
Balance Sheet | ||||||
| Total Assets | 161.39M | 173.64M | 180.32M | 231.55M | 256.32M | 287.40M |
| Cash, Cash Equivalents and Short-Term Investments | 101.39M | 114.60M | 129.13M | 159.55M | 203.24M | 255.48M |
| Total Debt | 5.66M | 6.97M | 9.30M | 9.16M | 10.91M | 989.00K |
| Total Liabilities | 41.23M | 45.53M | 32.81M | 31.21M | 32.69M | 18.72M |
| Stockholders Equity | 120.16M | 128.11M | 147.51M | 200.34M | 223.64M | 268.68M |
Cash Flow | ||||||
| Free Cash Flow | -28.77M | -17.99M | -11.53M | -44.39M | -50.39M | -24.75M |
| Operating Cash Flow | -24.66M | -14.94M | -8.75M | -25.53M | -46.01M | -21.64M |
| Investing Cash Flow | 11.77M | -18.20M | -78.03M | -20.04M | -9.69M | -3.11M |
| Financing Cash Flow | 96.00K | 16.00K | -20.00M | 1.87M | 3.47M | 221.66M |
CS Disco Technical Analysis
Positive
3.52
Price Trends
3.86
Positive
3.93
Positive
5.07
Negative
Market Momentum
0.10
Negative
58.47
Neutral
78.57
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LAW, the sentiment is Positive. The current price of 3.52 is below the 20-day moving average (MA) of 4.03, below the 50-day MA of 3.86, and below the 200-day MA of 5.07, indicating a neutral trend. The MACD of 0.10 indicates Negative momentum. The RSI at 58.47 is Neutral, neither overbought nor oversold. The STOCH value of 78.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LAW.
CS Disco Risk Analysis
CS Disco disclosed 64 risk factors in its most recent earnings report. CS Disco reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
CS Disco Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $585.19M | -33.16 | -5.41% | ― | -2.33% | -425.96% | |
68 Neutral | $771.33M | 82.14 | 16.65% | ― | 18.15% | 331.16% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
55 Neutral | $194.77M | -7.70 | -8.50% | ― | -9.70% | 61.30% | |
49 Neutral | $250.12M | -5.65 | -32.17% | ― | 11.07% | 27.51% |
* Technology Sector Average
LAW
CS Disco
4.30
-0.20
-4.44%
PUBM
PubMatic
17.78
7.21
68.21%
SMRT
SmartRent
1.42
0.17
13.60%
DSP
Viant Technology
13.24
1.24
10.33%
CS Disco Corporate Events
Executive/Board Changes
CS Disco Appoints Cybersecurity Veteran Andre Mintz to Board
Positive
Jul 23, 2026
On July 22, 2026, CS Disco, Inc. expanded its board of directors from eight to nine members and appointed veteran cybersecurity and privacy executive Andre Mintz as a Class II director, with a term running through the company’s 2029 annual m...
Executive/Board ChangesShareholder Meetings
CS Disco Stockholders Approve Directors and Auditor Selection
Positive
Jun 10, 2026
On June 10, 2026, CS Disco, Inc. held its 2026 Annual Meeting of Stockholders, at which shareholders elected James Offerdahl and Toby Williams as Class II directors to serve until the 2029 Annual Meeting, confirming the company’s board compo...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.