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CS Disco, Inc. (LAW) stock analysis

LAWNYSEServices-Prepackaged SoftwareFiscal year ends December 31
Financials through Q3 FY2026, quarter ended Sep 30, 2026Last filing: 10-Q on Nov 4, 2026Score 12/300% below fair value
$6.51+0.40 (+6.55%)

Close on Nov 12, 2026Market cap $422.63MP/E –Yield –

StockData Score

Prices as of Nov 11, 2026How the score works

Value2Growth3Performance1Health6Dividend0

Mixed12 of 30 checks passed

CS Disco passes 12 of the 30 checks behind our score; 11 could not be run for lack of data and count as not passed. Each dot in the shape is one check — hover it for the numbers.

Valuation
2/6
Growth
3/6
Past performance
1/6
Financial health
6/6
Dividend
0/6

What stands out

  • Trading below fair value

    The share price of $6.11 is below our fair value estimate of $6.13.

  • No debt

    CS Disco has no borrowings on its latest balance sheet.

  • Interest well covered

    No meaningful interest expense to cover.

  • Debt covered by cash flow

    There is no debt to cover.

What to watch

  • Margin of safety under 20%

    The price is 0.4% below fair value, less than the 20% cushion we look for.

  • Return on equity under 15%

    Return on equity was -25.4% over the last twelve months and averaged -28.2% over five years; we look for 15% on both.

  • Return on capital under 10%

    Return on invested capital was -134%, below the 10% that usually covers the cost of capital.

  • Revenue growing under 10% a year

    Revenue grew 5.1% a year over the last three fiscal years, short of the 10% we look for.

Valuation2/6

  • P/E against its history

    Not enough price and earnings history to compare.

  • P/E against the industry

    Needs positive earnings and enough profitable companies in the industry.

  • EV/EBITDA against its history

    Needs positive EBITDA and price history.

  • P/B below the industry

    CS Disco's price-to-book of 3.31 is below the Computer Programming, Data Processing, and Other Computer Related Services median of 3.32.

  • Trading below fair value

    The share price of $6.11 is below our fair value estimate of $6.13.

  • Margin of safety under 20%

    The price is 0.4% below fair value, less than the 20% cushion we look for.

Growth3/6

  • Revenue growing under 10% a year

    Revenue grew 5.1% a year over the last three fiscal years, short of the 10% we look for.

  • EPS growth over 3 years

    Needs positive EPS three years ago and today.

  • Earnings acceleration

    Needs positive net income now, a year ago and five years ago.

  • Growing faster than the industry

    Revenue grew 12.4% over the last twelve months; the Computer Programming, Data Processing, and Other Computer Related Services median is 9.6%.

  • Guidance raised

    CS Disco raised its Third quarter of 2026 Total revenue outlook on Aug 5, 2026.

  • Gross margin improving

    Gross margin was 74.8% over the last twelve months, against 74.6% a year earlier.

Past performance1/6

  • Return on equity under 15%

    Return on equity was -25.4% over the last twelve months and averaged -28.2% over five years; we look for 15% on both.

  • Return on capital under 10%

    Return on invested capital was -134%, below the 10% that usually covers the cost of capital.

  • Return on equity below the industry

    CS Disco's return on equity of -25.4% is below the Computer Programming, Data Processing, and Other Computer Related Services median of -1.2%.

  • Earnings over 5 years

    Needs positive net income five years ago and in the latest year.

  • Net margin above its 5-year average

    Net margin was -18.5% over the last twelve months, against a 5-year average of -34.2%.

  • Net margin below the industry

    CS Disco's net margin of -18.5% is below the Computer Programming, Data Processing, and Other Computer Related Services median of -4.8%.

Financial health6/6

  • No debt

    CS Disco has no borrowings on its latest balance sheet.

  • Debt not rising

    With no debt today, leverage cannot have risen.

  • Debt covered by cash flow

    There is no debt to cover.

  • Interest well covered

    No meaningful interest expense to cover.

  • Short-term assets cover short-term debts

    Current assets are 3.54 times current liabilities.

  • Low bankruptcy risk

    The Altman Z-score is 3.46; above 3 is the safe zone and below 1.8 the distress zone.

Dividend0/6

  • No dividend

    CS Disco has not paid a dividend in the last twelve months.

  • Yield against Treasuries

    No dividend.

  • Yield against the market

    No dividend.

  • Dividend stability

    No dividend.

  • Earnings cover

    No dividend.

  • Cash-flow cover

    No dividend.

Scores of similar companies

Fair value

How we estimate it

Our estimate per share

$6.13

The share price is 0% below this estimate.

20%+ below
Near fair value
20%+ above
$6.11Price
MethodMultiple usedOwn 5Y medianIndustry medianValue per shareWeight
P/B2.7×2.2×3.3×$5.0650%
P/S2.7×2.7×2.8×$7.2150%
Fair value$6.13100%

Valuation over time

Using the earnings and balance sheet published at each date, not today's.

  • P/B at month end
  • Own 5-year median 2.2
  • Computer Programming, Data Processing, and Other Computer Related Services median 3.3

An estimate from reported numbers and market multiples, not a price target or investment advice. It can be far off for companies whose profits are about to change sharply.

Market risk

From the past year of daily prices.

Liquidity

High risk

Average value traded per day
$1.12M
Value traded per 1% price move
$434.12K

Downside

High risk

Typical loss in a bad month
51.3%
Volatility (annualized)
76%
Sharpe ratio, 1 year
-0.18
Beta to the S&P 500 (5Y)
1.44

Typical bad-month loss, week by week

25%: high

Margins

Share of revenue, fiscal years 2019 to 2025

Gross margin

74.9%+4.7 pts over 5 years

Operating margin

-30.7%+2.2 pts over 5 years

Net margin

-28.3%+5.1 pts over 5 years

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