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Will the Box IPO disrupt these 3 cloud stocks with encouraging sales trends?

Stocks in this article: FFIVGOOGOTEX

Mary-Lynn Cesar, Kapitall: Do cloud stocks deserve a closer look before Box goes public?

Box is headed for an initial price offering (IPO). Talk of the cloud storage company going public has floated around since January, but now it’s official. Box — not to be confused with rival Dropbox, who is widely expected to go public this year — filed a prospectus for a $250 million offering on the NYSE Monday afternoon. 

[Read more from Kapitall: Will Ray Bans frames be enough to make Google Glass cool?]

The Wall Street Journal reports that the 9 year old company was most recently valued at $2.2 billion. Dropbox’s valuation stands at $10 billion.

According to the filing, Box’s revenue soared to $124.2 million in the fiscal year ending January 31. Revenue was $58.8 million just a year earlier. On the other hand, the California-based startup recorded $168.6 million in net losses this past January compared to $112.6 million a year ago.

The filing also names Box’s main competition within the cloud storage landscape: Citrix Systems (CTXS), Dropbox, EMC (EMC), Google (GOOG), IBM (IBM), and Microsoft (MSFT)“Many of our competitors and potential competitors are larger and have greater name recognition, much longer operating histories, larger marketing budgets and significantly greater resources than we do,” the filing states.

Investing Ideas

Cloud storage is big business; in fact, research firm MarketsandMarkets predicts that the industry will grow to $46.8 billion by 2018. So, drawing inspiration from Box's IPO filing, we looked for investment opportunities amongst cloud stocks. 

We began with a group of cloud stocks belonging to the  First Trust ISE Cloud Computing Index Fund (SKYY)

Given Box's impressive revenue growth over the past year, we decided to take a closer look at the revenue of our group of cloud stocks. Specifically, we screened for stocks experiencing  faster growth in revenue than accounts receivable year-over-year, as well as accounts receivable comprising a smaller portion of current assets over the same period.

Revenue is the money a company makes through the sale of its goods and services. Accounts receivables is the portion of revenue a company has yet to receive for goods or services it has already provided. There's no guarantee that the company will ever get that money, so the less revenue attributable to receivables, the healthier the revenue. 

Click on the interactive chart to view data over time. 

1. Open Text Corp. ( OTEX, Earnings, Analysts, Financials): Develops, markets, sells, licenses, and supports enterprise content management (ECM) solutions primarily in North America and Europe.

Market cap at $5.71B, most recent closing price at $48.31.

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