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Investing.com - Needham raised its price target on CS Disco Inc. (NYSE:LAW) to $10.00 from $8.00 on Thursday, while maintaining a Buy rating on the legal technology company. The new target represents significant upside from the current price of $6.22, with InvestingPro data showing the stock appears undervalued based on Fair Value calculations.
The price target increase follows CS Disco’s third-quarter results, which showed accelerating revenue growth of 12.8% driven by increased penetration with enterprise accounts. The quarter’s performance included a $1.3 million benefit from a contingent case, though software revenue still achieved double-digit growth even excluding this contribution. This acceleration outpaces the company’s 4.05% revenue growth over the last twelve months.
CS Disco effectively raised its fourth-quarter revenue guidance by $1.3 million from previously implied levels, as the contingent case had already been incorporated into the company’s fiscal year 2025 guidance but not specifically into third-quarter projections.
The company also increased its adjusted EBITDA guidance, which Needham attributed to tight expense control. Needham expressed increased conviction in CS Disco’s ability to accelerate revenue and reach adjusted EBITDA profitability by the fourth quarter of 2026. InvestingPro data shows the company currently has an EBITDA of -$42.6M, with analysts not anticipating profitability this year.
The new $10 price target represents approximately 3.3 times enterprise value to estimated fiscal year 2025 revenue, according to Needham’s analysis. The stock has shown strong momentum with a 75.71% price return over the past six months and 24.65% year-to-date, despite its high volatility (Beta of 2.13). Access CS Disco’s complete financial health analysis and 8 additional ProTips through InvestingPro’s comprehensive research report.
In other recent news, CS Disco LLC reported better-than-expected results for its third quarter of 2025. The company announced an earnings per share (EPS) of -0.01, which was an improvement over the anticipated -0.06. Revenue for the quarter reached $40.9 million, surpassing projections of $38.46 million. These results indicate notable year-over-year growth and operational improvements for CS Disco. Despite challenges in achieving profitability, the positive earnings report has been a key development for the company. Additionally, the earnings call highlighted the company’s efforts in enhancing its operational framework. These recent developments have caught the attention of investors and analysts alike.
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