Forensic Analysis · Technology / Software · as of Jul 2, 2026
CS Disco, Inc. (LAW)
A forensic read on CS Disco, Inc. built from its complete SEC filings — financial-health screens, earnings quality, red flags and a price-aware rating. Reproducible math, not opinion.
D · Weak — demands caution
Forensic grade
Distress
Financial health
-1.1
Altman Z-score
Clean
Earnings quality
4
Forensic signals
-32.7%
ROE
$251M
Market cap
CS Disco, Inc. earns a D (Weak — demands caution) forensic quality grade, and its Altman Z-score is -1.1, placing it in the Distress zone. 4 forensic signals were flagged in its latest SEC filings, led by return on invested capital.
What the filings flag
-33%Return on invested capital.Return on invested capital is -33% and rising from -187% — well below its ~10% cost of capital, so reinvested dollars may be destroying value, not building it.
+1.7%/yrShare-count dilution.Diluted share count changed +5% over the last 3 years to FY2025 (+1.7%/yr). The count is GROWING — existing holders are being diluted. That's ~1.7% shaved off per-share growth every year — total profit has to grow that much just to keep earnings-per-share flat, and a stake held since FY2022 has been diluted ~5%.
+13.5%Accruals ratio.Net operating assets grew +13.5% relative to their average in FY2025 — the accrual component of earnings. Accruals are building faster than is comfortable — part of profit is sitting in the balance sheet rather than turning to cash. The build is led by receivables (up +11% on the year). The cash-flow cross-check agrees: reported earnings ran behind operating cash by -29% of net operating assets.
16% of revStock-based comp load.Stock-based compensation ran 16% of revenue in FY2025 — about $0.40 per diluted share. Meaningful — reported free cash flow flatters the economics, since SBC is a real cost paid in shares.
Key fundamentals
Net Margin-28.3%
Free Cash Flow$-18.0M
Latest Revenue$156.8M
Return on Equity-34.6%
Revenue Growth YoY+8.3%
Go deeper — free with an account
The forensic grade and screens above are free — no account needed. An account adds the full interactive deep-dive on CS Disco, Inc.:
🔒The written investment read — what the numbers mean, in plain English
🔒Ask anything about LAW's filings — AI Q&A across the 10-K, 10-Qs & 8-Ks
🔒Interactive valuation — reverse-DCF sliders, Monte Carlo & scenario stress
🔒Calibrated 12-month price forecast, with the math shown