Head to Head Analysis: Sprout Social (NASDAQ:SPT) and CS Disco (NYSE:LAW)

Sprout Social (NASDAQ:SPT) and CS Disco (NYSE:LAW) are both small-cap technology companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, institutional ownership, risk, analyst recommendations, profitability, earnings and valuation.

Risk & Volatility

Sprout Social has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500. Comparatively, CS Disco has a beta of 1.88, meaning that its stock price is 88% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings for Sprout Social and CS Disco, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sprout Social	2	3	3	1	2.33
CS Disco	1	1	2	0	2.25

Sprout Social presently has a consensus price target of $10.43, suggesting a potential upside of 10.12%. CS Disco has a consensus price target of $8.00, suggesting a potential upside of 92.08%. Given CS Disco’s higher possible upside, analysts plainly believe CS Disco is more favorable than Sprout Social.

Valuation and Earnings

This table compares Sprout Social and CS Disco”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sprout Social	$457.55 million	1.25	-$43.33 million	($0.50)	-18.94
CS Disco	$156.85 million	1.72	-$44.37 million	($0.63)	-6.61

Sprout Social has higher revenue and earnings than CS Disco. Sprout Social is trading at a lower price-to-earnings ratio than CS Disco, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

58.1% of CS Disco shares are held by institutional investors. 9.6% of Sprout Social shares are held by insiders. Comparatively, 16.8% of CS Disco shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Sprout Social and CS Disco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sprout Social	-6.13%	-8.80%	-3.64%
CS Disco	-24.20%	-26.58%	-19.89%

Summary

Sprout Social beats CS Disco on 9 of the 15 factors compared between the two stocks.

About Sprout Social

Sprout Social, Inc. designs, develops, and operates a web-based social media management platform in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company provides cloud software for social messaging, data and workflows in a unified system of record, intelligence, and action. It offers integrated tools, such as social engagement/response; publishing; reporting and analytics; social listening and business intelligence; reputation management; social commerce; employee advocacy; and automation and workflows. In addition, the company provides smart inbox, social customer relationship management, social monitoring and alerts, customer service tools, and automation; and centralized content planning, creation, and publishing, automated scheduling, content performance reporting, suggested content, message approval workflows, publishing permissions and governance, and content and asset libraries. Further, it offers social media; content performance, customer service and team, custom report builder, and reporting API; and market research, brand health, competitive insights, consumer trends, and product feedback; and social commerce, reputation management, employee advocacy, mobile applications, and chat bot creation and management. Additionally, the company offers professional services consisting of consulting and training services. It serves social and community management; public relations; marketing; influencer marketing; customer service and care; commerce, sales and customer acquisition; recruiting and hiring, product development, and business strategy; and small-and-medium-sized businesses, mid-market companies, enterprises, marketing agencies, government, non-profit, and educational institutions. Sprout Social, Inc. was incorporated in 2010 and is headquartered in Chicago, Illinois.

About CS Disco

CS Disco, Inc. provides cloud-native and artificial intelligence-powered legal solutions for legal hold, legal request, ediscovery, legal document review, and case management in the United States and internationally. It offers DISCO Request, a solution that automates response compliance for legal requests; and DISCO Ediscovery, a solution that automates the ediscovery process and saves legal departments from manual tasks associated with collecting, processing, enriching, searching, reviewing, analyzing, producing, and using enterprise data that is at issue in legal matters. The company also provides DISCO Hold, a solution that automates manual work to preserve data, notify custodians, track holds with a defensible audit trail, and collect data when ready; DISCO Review, an AI-powered document review solution that delivers legal document reviews; and DISCO Case Builder, a solution that allows legal professionals to collaborate with teams to build a compelling case by offering a single place to search, organize, and review witness testimony and other legal data. The company's solutions are used in various legal matters comprising litigation, investigation, compliance, and diligence. It serves enterprises, law firms, legal services providers, and governments. CS Disco, Inc. was founded in 2012 and is headquartered in Austin, Texas.