Cloud storage specialist Box (NYSE:BOX) reported better-than-expected fourth quarter earnings last week that surprised Wall Street analysts with their strength. But when it comes to whether that translates into making the stock a buy, the jury is out.

In this clip from the Motley Fool Money podcast, Jason Moser explains why, despite the company's seemingly strong performance and growth, Box's potential remains so shaky, and what investors should do before buying into the company.

A transcript follows the video.

This podcast was recorded on March 11, 2016. 

Chris Hill: Box, the cloud computing business, surprised Wall Street with better-than-expected fourth-quarter results. Jason, I like an underdog as much as the next guy, but holy cow, they're competing with the likes of -- this is a $1.5 billion company that's competing with [laughs] IBM, Microsoft, and EMC.

Jason Moser: Yeah, you're right. Just like Jeff was talking about with Square, the jury is still out here as to whether this is a potentially good investment or not. I think the biggest question is, what is the competitive advantage here? This is enterprise cloud storage and solutions, which is seemingly just dime-a-dozen at this point. Obviously a very large market and a very small company.

They make money via the subscription model that they have. The number of paying customers, companies, and organizations is 57,000, which is up from 45,000 a year ago. Their user base of 41 million registered users is impressive. But when you consider that only 10% of that user base is actually paying for Box's services, that puts things into a little bit more perspective there. So, customer acquisition costs are very high. The key is to acquire the customers, keep them, and upsell them. Very difficult to do in this market, because it is extremely competitive. I think leadership is an asset here, but again, I'm not sold on the competitive advantage here, and I would advise shareholders or potential shareholders to sit back and give this one a little bit of time to play out.

Ron Gross: Have all non-rectangular names been taken? Is that where we're at this point?

Hill: [laughs] Give us time.

Jeff Fischer: [laughs] "Circle" will be the next company.

Jason Moser has no position in any stocks mentioned. Ron Gross owns shares of Microsoft. Chris Hill has no position in any stocks mentioned. Jeff Fischer has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.