CS Disco

LAW

Software - Application · Technology

Price

$4.05

-0.16 (-3.80%)

Market Cap

$259.7M

Winston Score

Winston is worried

Below-average fundamentals — multiple weak pillars.

Share count rising — dilution

+6.4% over 4y

The company has issued more shares over this period, which dilutes each existing shareholder’s stake.

Diluted shares outstanding: 58.0M (2021) → 61.7M (2025)

CS Disco builds software that helps lawyers and law firms manage legal cases. Its main product is a cloud-based platform that organizes, searches, and reviews large amounts of documents during lawsuits and investigations — a process called "eDiscovery." Customers are mostly corporate legal teams and law firms in the United States.

The company charges subscription and usage-based fees, meaning customers pay based on how much data they store and process on the platform. CS Disco operates primarily in the US and generates roughly $150 million in annual revenue, but it is not yet profitable, losing about 28 cents for every dollar it earns. The legal software market is competitive, with larger players like Relativity and Everlaw also fighting for the same customers, and CS Disco's main challenge is reaching profitability before its cash reserves run thin.

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+14.3% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

+21.1% YoY

YoY Growth Rate

Steady EPS growth

R&D Spend

$57M/ year

↑ Rising (+10% vs prior year)

36.1% of revenue

2.4x the sector average (15%)

Investing heavily in future products and technology

Insider Activity

57.5%ownership

↓ Declining

Insider ownership declining — could be dilution or selling

Cash Runway

~4 months

$18M cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Short runway — potential dilution ahead through share issuance

Heavy R&D investment

CS Disco is putting 36% of revenue into R&D and that number is rising. That's 2.4x the sector average.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

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Quality

Gross Margin

74.2%

Premium pricing power — 74.2% gross margin

Operating Margin

-24.1%

Losing money on operations — -24.1%

ROCE

-8.1%

Weak — -8.1% return on capital

Negative ROIC means the business is losing money on every dollar invested in it.

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Growth

Sales YoY

+11.1%

Steady sales growth (11.1% YoY)

EPS YoY

N/A

—

Data not available

EPS Consistency

0/8 quarters

Earnings rarely grow — volatile business

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Cash Flow

Cash Conversion

N/A

—

Data not available

FCF Margin

-11.9%

Burning cash (-11.9%)

Free cash flow is negative. They are burning cash, not generating it.

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Stability

Debt / Equity

N/A

Data not available

Interest Cover

N/A

Data not available

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Valuation

P/E Ratio (TTM)

N/M

—

Negative earnings — P/E not meaningful

P/E vs Forward

N/A

not available

Data not available

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Dividends

Not applicable for this business.

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