CS Disco (NYSE:LAW – Get Free Report) and Smith Micro Software (NASDAQ:SMSI – Get Free Report) are both small-cap technology companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, risk, dividends, valuation, earnings, institutional ownership and profitability.
Analyst Ratings
This is a summary of recent ratings for CS Disco and Smith Micro Software, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| CS Disco | 1 | 1 | 2 | 0 | 2.25 |
| Smith Micro Software | 1 | 0 | 2 | 0 | 2.33 |
CS Disco currently has a consensus price target of $8.00, indicating a potential upside of 79.90%. Smith Micro Software has a consensus price target of $12.50, indicating a potential upside of 427.43%. Given Smith Micro Software’s stronger consensus rating and higher possible upside, analysts clearly believe Smith Micro Software is more favorable than CS Disco.
Valuation & Earnings
This table compares CS Disco and Smith Micro Software”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| CS Disco | $156.85 million | 1.84 | -$44.37 million | ($0.63) | -7.06 |
| Smith Micro Software | $17.36 million | 0.76 | -$29.33 million | ($3.52) | -0.67 |
Smith Micro Software has lower revenue, but higher earnings than CS Disco. CS Disco is trading at a lower price-to-earnings ratio than Smith Micro Software, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
CS Disco has a beta of 1.91, meaning that its share price is 91% more volatile than the S&P 500. Comparatively, Smith Micro Software has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500.
Profitability
This table compares CS Disco and Smith Micro Software’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| CS Disco | -24.20% | -26.58% | -19.89% |
| Smith Micro Software | -92.60% | -44.59% | -31.78% |
Institutional and Insider Ownership
58.1% of CS Disco shares are owned by institutional investors. Comparatively, 20.8% of Smith Micro Software shares are owned by institutional investors. 16.8% of CS Disco shares are owned by insiders. Comparatively, 34.7% of Smith Micro Software shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Summary
CS Disco beats Smith Micro Software on 8 of the 13 factors compared between the two stocks.
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.
About Smith Micro Software
Smith Micro Software, Inc. engages in the development and sale of software to enhance the mobile experience to wireless and cable service providers in the Americas, Europe, the Middle East, and Africa. The company offers SafePath Family, SafePath IoT, SafePath Home, and SafePath Premium product suite, which provides tools to protect digital lifestyles and manage connected devices inside and outside the home; and CommSuite, a messaging platform that helps mobile service provides deliver a next-generation voicemail experience to mobile subscribers, as well as enables multi-language voice-to-text (VTT) transcription messaging. It also offers ViewSpot, a retail display management platform that provides on-screen and interactive demos to wireless carriers and other smartphone retailers; and technical support and customer services. Smith Micro Software, Inc. was founded in 1982 and is headquartered in Pittsburgh, Pennsylvania.
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