As you might know, CS Disco, Inc. (NYSE:LAW) recently reported its quarterly numbers. 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. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. 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.

After the latest results, the six analysts covering CS Disco are now predicting revenues of US$150.8m in 2025. If met, this would reflect 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. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values CS Disco at US$9.00 per share, while the most bearish prices 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.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the 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 note is the forecast of increased losses next year, suggesting all may not be well at CS Disco. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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.

With that in mind, we wouldn't be too quick to come to a conclusion on CS Disco. Long-term earnings power is much more important than next year's profits. We have forecasts for CS Disco going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - CS Disco has 1 warning sign we think you should be aware of.

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