'You have to ask yourself, does it deserve to trade like a cloud king? I think so,' he continued. Trading at 8.5 times next year's sales estimates and 124 times 2019 earnings estimates, Dropbox's stock may seem expensive, but is more or less in line with the other 'cloud kings,' Cramer said. 'Put it all together and I'm a big fan of Dropbox the company and its CEO, Drew Houston,' he said. To maintain its growth rate, it needs to switch between two million and four million free users into paying customers each year.īut that's less than 1 percent of its 500 million free subscribers, Cramer noted, adding that the company will now have millions of dollars to invest in and bolster the business. Given that they just raised anywhere from $600 to $750 million, Dropbox is going to have a pretty deep pocket for a newly public company.'Ĭramer's main point of concern was whether Dropbox would be able to keep turning its non-paying subscribers into paying customers. 'The company's using the proceeds of the IPO to pay back its modest amount of debt, and it already $430 million in cash on the balance sheet at the end of last year. 'The balance sheet? Clean as a whistle,' the 'Mad Money' host said.

Its gross margin, or what it makes after the cost of goods sold, exploded from 32.5 percent in 2015 to 66.7 percent in 2017.

In 2017, Dropbox had 31 percent revenue growth, in line with most other public cloud companies. Cramer was also impressed by the company's numbers.

Is dropbox stock worth buying