Disco: Look Beyond Results Miss

Disco Corporation remains a 'Buy,' as the substantial price correction following its 1QFY26 earnings miss appears to be overdone. The company's 1QFY2026 operating income was 3% below consensus, due to a delay in the purchase timing of certain equipment. I anticipate a 2QFY26 turnaround, with DSCSY management guiding for a 14% QoQ operating profit rebound and an increase in deliveries relating to Co-Packaged Optics.

I've kept Disco Corporation (DSCSY) (DISPF) as a "Buy"-rated name. Its 1QFY26 (YE Mar 2027) performance didn't meet expectations. But the price correction seems overdone. An improved set of Q2 numbers is highly probable as well.