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CS Disco (LAW)
NYSE:LAW
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CS Disco
(NYSE:LAW)
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Rating:62Neutral
Price Target:
$9.50
▲(57.02% Upside)
CS Disco's stock score is driven by strong technical momentum, despite financial challenges. The company's revenue growth and strategic focus are promising, but profitability and cash flow issues, along with valuation concerns, weigh on the score.
CS Disco (LAW) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$524.30M
Dividend YieldN/A
Average Volume (3M)139.09K
Price to Earnings (P/E)―
Beta (1Y)1.00
Revenue Growth6.33%
EPS Growth-66.34%
CountryUS
Employees561
SectorN/A
Sector StrengthN/A
IndustrySoftware - Application
Share Statistics
EPS (TTM)-0.01
Shares Outstanding62,491,592
10 Day Avg. Volume186,114
30 Day Avg. Volume139,092
Financial Highlights & Ratios
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 Cap0.00
Enterprise Value/Revenue0.00
Enterprise Value/Gross Profit0.00
Enterprise Value/Ebitda0.00
Forecast
1Y Price Target
$7.25Price Target Upside19.83% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
CS Disco Business Overview & Revenue Model
Company DescriptionCS Disco (LAW) is a leading provider of cloud-based legal technology solutions, specializing in eDiscovery, case management, and legal document management. The company serves legal professionals, law firms, and corporate legal departments across various sectors by offering innovative software that streamlines the legal process, ensures compliance, and enhances collaboration. With a strong focus on technology and user experience, CS Disco aims to transform the way legal services are delivered in a digital age.
How the Company Makes MoneyCS 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 Earnings Call Summary
Earnings Call Date:Nov 05, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 19, 2026
Earnings Call Sentiment Neutral
The earnings call revealed solid revenue growth, improved operational performance, and successful AI adoption, which are positive indicators. However, the company's dependency on contingent revenue and negative cash flow highlight areas for concern. Overall, while the highlights are significant, the lowlights introduce some uncertainties.Q3-2025 Updates
Positive Updates
Accelerated Revenue Growth
Software revenue in Q3 was $35.2 million, up 17% year-over-year, while total revenue was $40.9 million, up 13% year-over-year. Even without a one-time revenue event, the company exceeded the high end of its guidance range.
Customer Success and Strategic Focus
The company ended Q3 with 326 customers contributing more than $100,000 each in total revenue over the last 12 months, accounting for 76% of the total revenue. A large multinational company selected DISCO for a significant legal matter, demonstrating the effectiveness of the company's strategy and execution.
Adoption of AI Capabilities
The number of customers utilizing Cecilia AI more than tripled year-over-year, with consistent growth in Auto Review adoption throughout 2025, highlighting successful AI integration and customer satisfaction.
Improved Operational Metrics
The adjusted EBITDA margin improved to negative 1% from negative 12% in the prior year, representing a $4.2 million year-over-year improvement.
Positive Industry Recognition
IDC named DISCO a leader in the 2025 IDC MarketScape for worldwide end-to-end eDiscovery software, acknowledging the company's ability to handle large data volumes and support core workflows effectively.
Negative Updates
Negative Cash Flow
Operating cash flow for the first three quarters of 2025 was negative $15.7 million, compared to negative $10.8 million in the same period of the prior year.
Contingent Revenue Dependency
A significant portion of the revenue growth was due to a $1.3 million revenue recognition from a contingent case, which raises questions about the sustainability of similar revenue contributions in the future.
Company Guidance
In their third quarter call for fiscal year 2025, CS Disco reported a 13% year-over-year increase in total revenue, reaching $40.9 million, and a 17% increase in software revenue, totaling $35.2 million. Adjusted EBITDA improved significantly, with a negative $297,000, representing a negative 1% margin, a $4.2 million improvement from the previous year. The company ended the quarter with $113.5 million in cash and short-term investments, maintaining no debt. The number of customers contributing over $100,000 in revenue rose to 326, accounting for 76% of total revenue. Notably, the quarter's results included $1.3 million in contingent revenue from a successfully concluded legal matter. CS Disco projects total revenue for Q4 2025 to be between $38.75 million and $40.75 million, with software revenue expected to range from $33.75 million to $34.75 million. For the entire fiscal year, the company forecasts total revenue between $154.4 million and $156.4 million and software revenue between $132.6 million and $133.6 million, while aiming for adjusted EBITDA breakeven by Q4 2026.CS Disco Financial Statement Overview
Summary
Income Statement
45
Neutral
Balance Sheet
55
Neutral
Cash Flow
40
Negative
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CS Disco Technical Analysis
Positive
6.05
Price Trends
7.08
Positive
6.31
Positive
5.18
Positive
Market Momentum
0.42
Positive
57.66
Neutral
29.58
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 6.05 is below the 20-day moving average (MA) of 7.91, below the 50-day MA of 7.08, and above the 200-day MA of 5.18, indicating a bullish trend. The MACD of 0.42 indicates Positive momentum. The RSI at 57.66 is Neutral, neither overbought nor oversold. The STOCH value of 29.58 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LAW.
CS Disco Peers Comparison
UnderperformOutperform
Sector (―)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
| ― | ― | ― | ― | ― | ― | ― | |
65 Neutral | $734.22M | 450.00 | 4.45% | ― | 22.97% | 49.49% | |
62 Neutral | $395.43M | -5.74 | -25.48% | ― | -24.30% | -181.62% | |
62 Neutral | $524.30M | -8.09 | -41.00% | ― | 6.33% | -66.34% | |
59 Neutral | $244.82M | -7.89 | -20.20% | ― | -6.23% | 28.57% | |
59 Neutral | $409.84M | -48.99 | -2.85% | ― | -0.68% | -146.14% | |
48 Neutral | $618.16M | ― | -28.65% | ― | 16.40% | 22.80% |
* Sector Average
LAW
CS Disco
8.12
3.04
59.84%
PUBM
PubMatic
8.96
-6.41
-41.70%
FRGE
Forge Global Holdings
44.27
31.07
235.38%
ONTF
ON24
5.83
-0.86
-12.86%
SMRT
SmartRent
2.05
0.46
28.93%
DSP
Viant Technology
11.88
-8.21
-40.87%
CS Disco Corporate Events
CS Disco’s Earnings Call: Growth Amid Challenges
Nov 7, 2025
CS Disco, Inc. recently held its earnings call, revealing a mixed sentiment among investors and analysts. The company showcased impressive revenue growth and operational improvements, driven by successful AI adoption. However, concerns linger due to its dependency on contingent revenue and ongoing negative cash flow. While the positive highlights are noteworthy, the uncertainties introduced by the lowlights warrant cautious optimism.
CS Disco Reports Revenue Growth Amidst Financial Losses
Nov 6, 2025
CS Disco, Inc., a leading provider of cloud-native litigation technology solutions, leverages AI to enhance legal outcomes for law firms and corporations. In its third quarter of 2025, DISCO reported a total revenue of $40.9 million, marking a 13% increase from the previous year, driven by a significant rise in software revenue. Despite this growth, the company recorded a GAAP net loss of $13.7 million, though it showed improvement in adjusted EBITDA, which stood at a loss of $0.3 million compared to a $4.5 million loss in the same quarter last year.
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.