CS Disco (NYSE:LAW – Get Free Report) and Synopsys (NASDAQ:SNPS – Get Free Report) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, earnings, risk, profitability, analyst recommendations, institutional ownership and dividends.
Analyst Ratings
This is a breakdown of recent ratings and target prices for CS Disco and Synopsys, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| CS Disco | 1 | 1 | 1 | 0 | 2.00 |
| Synopsys | 0 | 1 | 12 | 0 | 2.92 |
CS Disco presently has a consensus price target of $6.17, suggesting a potential upside of 48.99%. Synopsys has a consensus price target of $613.43, suggesting a potential upside of 19.24%. Given CS Disco’s higher probable upside, equities analysts clearly believe CS Disco is more favorable than Synopsys.
Earnings & Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| CS Disco | $145.92 million | 1.72 | -$42.15 million | ($0.94) | -4.40 |
| Synopsys | $6.07 billion | 13.10 | $2.26 billion | $13.52 | 38.05 |
Synopsys has higher revenue and earnings than CS Disco. CS Disco is trading at a lower price-to-earnings ratio than Synopsys, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares CS Disco and Synopsys’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| CS Disco | -38.51% | -22.30% | -19.44% |
| Synopsys | 36.12% | 20.48% | 13.51% |
Institutional and Insider Ownership
58.0% of CS Disco shares are owned by institutional investors. Comparatively, 85.5% of Synopsys shares are owned by institutional investors. 16.1% of CS Disco shares are owned by company insiders. Comparatively, 0.6% of Synopsys shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Risk and Volatility
CS Disco has a beta of 2.05, meaning that its stock price is 105% more volatile than the S&P 500. Comparatively, Synopsys has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500.
Summary
Synopsys beats CS Disco on 11 of the 14 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 Synopsys
Synopsys, Inc. provides electronic design automation software products used to design and test integrated circuits. It operates in three segments: Design Automation, Design IP, and Software Integrity. The company offers Digital and Custom IC Design solution that provides digital design implementation solutions; Verification solution that offers virtual prototyping, static and formal verification, simulation, emulation, field programmable gate array (FPGA)-based prototyping, and debug solutions; and FPGA design products that are programmed to perform specific functions. It also provides intellectual property (IP) solutions for USB, PCI Express, DDR, Ethernet, MIPI, HDMI, and Bluetooth low energy applications; logic libraries and embedded memories; processor cores, software, and application-specific instruction-set processor tools for embedded applications; security IP solutions; IP solutions for automotive market; and system-on-chip (SoC) infrastructure IP, datapath and building block IP, and verification IP products, as well as mathematical and floating-point components, and Arm AMBA interconnect fabric and peripherals. In addition, the company offers HAPS FPGA-based prototyping systems; virtual prototyping solutions; and Platform Architect solutions for SoC architecture analysis and optimization, as well as optical products, and mechatronic simulations. Further, it provides security and quality testing products, managed services, programs and professional services, and training that enable its customers to detect and remediate security vulnerabilities, and defects in the software development lifecycle, as well as manufacturing solutions. Additionally, the company provides intelligent orchestration solution, software risk manager, and black duck software composition analysis tools. It serves electronics, financial services, automotive, medicine, energy, and industrial areas. The company was incorporated in 1986 and is headquartered in Sunnyvale, California.
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