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CS Disco (LAW) Moves 11.8% Higher: Will This Strength Last?

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CS Disco (LAW - Free Report) shares soared 11.8% in the last trading session to close at $7.31. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 29.6% loss over the past four weeks.

The upswing can be attributed to CS Disco’s expanding portfolio. The company recently launched AI Timelines as part of DISCO Case Builder. AI Timelines is intended to automate previously tedious and time-consuming tasks to facilitate the handling of complex client disputes.

Moreover, the exit of CEO and co-founder Kiwi Camara, who has been accused of misconduct, also drove the share price.

This legal technology company is expected to post quarterly loss of $0.12 per share in its upcoming report, which represents a year-over-year change of +50%. Revenues are expected to be $34.4 million, down 0.2% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For CS Disco, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on LAW going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

CS Disco is part of the Zacks Internet - Software industry. PubMatic, Inc. (PUBM - Free Report) , another stock in the same industry, closed the last trading session 1.8% lower at $11.99. PUBM has returned -1.8% in the past month.

For PubMatic, Inc., the consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.08. This represents a change of -136.4% from what the company reported a year ago. PubMatic, Inc. currently has a Zacks Rank of #3 (Hold).


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