Comparing CS Disco (NYSE:LAW) and Smith Micro Software (NASDAQ:SMSI)

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

Analyst Ratings

This is a summary of current recommendations and price targets for Smith Micro Software and CS Disco, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Smith Micro Software	1	0	2	0	2.33
CS Disco	1	1	2	0	2.25

Smith Micro Software currently has a consensus target price of $12.50, indicating a potential upside of 436.48%. CS Disco has a consensus target price of $8.00, indicating a potential upside of 62.07%. Given Smith Micro Software’s stronger consensus rating and higher probable upside, research analysts clearly believe Smith Micro Software is more favorable than CS Disco.

Volatility & Risk

Smith Micro Software has a beta of 0.75, indicating that its share price is 25% less volatile than the S&P 500. Comparatively, CS Disco has a beta of 1.91, indicating that its share price is 91% more volatile than the S&P 500.

Profitability

This table compares Smith Micro Software and CS Disco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Smith Micro Software	-92.60%	-44.59%	-31.78%
CS Disco	-24.20%	-26.58%	-19.89%

Institutional and Insider Ownership

20.8% of Smith Micro Software shares are owned by institutional investors. Comparatively, 58.1% of CS Disco shares are owned by institutional investors. 34.7% of Smith Micro Software shares are owned by company insiders. Comparatively, 16.8% of CS Disco shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Smith Micro Software and CS Disco”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Smith Micro Software	$17.36 million	0.75	-$29.33 million	($3.52)	-0.66
CS Disco	$156.85 million	2.04	-$44.37 million	($0.63)	-7.83

Smith Micro Software has higher earnings, but lower revenue 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.

Summary

CS Disco beats Smith Micro Software on 8 of the 13 factors compared between the two stocks.

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.

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.