Analyzing Karooooo (NASDAQ:KARO) and CS Disco (NYSE:LAW)

Karooooo (NASDAQ:KARO) and CS Disco (NYSE:LAW) are both small-cap computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, institutional ownership, risk, dividends, analyst recommendations, profitability and earnings.

Insider & Institutional Ownership

58.1% of CS Disco shares are held by institutional investors. 74.7% of Karooooo shares are held by company insiders. Comparatively, 16.1% of CS Disco shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Karooooo	19.90%	31.64%	20.03%
CS Disco	-40.00%	-26.05%	-21.14%

Volatility & Risk

Karooooo has a beta of 1.06, indicating that its share price is 6% more volatile than the S&P 500. Comparatively, CS Disco has a beta of 2.11, indicating that its share price is 111% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations for Karooooo and CS Disco, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Karooooo	0	2	4	0	2.67
CS Disco	1	1	1	0	2.00

Karooooo presently has a consensus target price of $58.25, suggesting a potential upside of 36.45%. CS Disco has a consensus target price of $7.75, suggesting a potential upside of 17.12%. Given Karooooo’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Karooooo is more favorable than CS Disco.

Valuation & Earnings

This table compares Karooooo and CS Disco”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Karooooo	$249.96 million	5.28	$50.38 million	$1.79	23.85
CS Disco	$144.84 million	2.85	-$55.77 million	($1.01)	-6.55

Karooooo has higher revenue and earnings than CS Disco. CS Disco is trading at a lower price-to-earnings ratio than Karooooo, indicating that it is currently the more affordable of the two stocks.

Summary

Karooooo beats CS Disco on 12 of the 14 factors compared between the two stocks.

About Karooooo

Karooooo Ltd. provides mobility software-as-a-service (SaaS) platform for connected vehicles in South Africa, rest of Africa, Europe, the Asia-Pacific, the Middle East, and the United States. The company offers Fleet Telematics, a fleet management SaaS platform that provides real-time insights; LiveVision, which offers pro-active risk management and fleet visibility; MiFleet advanced fleet administration and business intelligence that provides cost management and administration capability services; and Karooooo Logistics, a software application for management of last mile delivery and general operational logistics. It provides Cartrack Field Service, a software application for management of field and on site workers; Business Intelligence for high-level view of fleet statistics; asset tracking for tracking and tracing moveable assets; asset recovery services that assists vehicle owners and insurance companies with the recovery of vehicles and other assets; and insurance telematics that allows insurers to tailor premiums for commercial and consumer customers using analytics; Protector, a safety package for consumer vehicles; and Car Watch, a mobile application that lets users track and watch their vehicles. In addition, the company offers specialist mobility solutions that include Bike Track, a GPS-based solution for commercial motorbike fleets; Credit Management that predicts payment cycles and facilitate active credit management for asset-based vehicle finance; electronic monitoring services application that allows law enforcement agencies to monitor persons of interest; and mobility and monitoring solutions, such as Carzuka, cartrack insurance agency, and on-demand rideshare taxi application, as well as smart IoT products. It provides its solutions through direct sales force to consumers and sole proprietors, small and medium-sized businesses, large enterprises, and other connected devices. Karooooo Ltd. was founded in 2001 and is headquartered in Singapore.

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.