The CS Disco, Inc. (NYSE:LAW) Third-Quarter Results Are Out And Analysts Have Published New Forecasts

Last week saw the newest quarterly earnings release from CS Disco, Inc. (NYSE:LAW), an important milestone in the company's journey to build a stronger business. The results look positive overall; while revenues of US$36m were in line with analyst predictions, statutory losses were 5.1% smaller than expected, with CS Disco losing US$0.15 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on CS Disco after the latest results.

View our latest analysis for CS Disco

Taking into account the latest results, the consensus forecast from CS Disco's six analysts is for revenues of US$150.8m in 2025. This reflects a reasonable 5.0% improvement in revenue compared to the last 12 months. Losses are expected to increase slightly, to US$0.65 per share. Before this earnings announcement, the analysts had been modelling revenues of US$154.2m and losses of US$0.56 per share in 2025. So it's pretty clear the analysts have mixed opinions on CS Disco after this update; revenues were downgraded and per-share losses expected to increase.

There was no major change to the consensus price target of US$6.67, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic CS Disco analyst has a price target of US$9.00 per share, while the most pessimistic values it at US$5.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the CS Disco's past performance and to peers in the same industry. It's pretty clear that there is an expectation that CS Disco's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 4.0% growth on an annualised basis. This is compared to a historical growth rate of 17% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 12% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than CS Disco.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for CS Disco going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with CS Disco .

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.