Cloud stocks have been among the biggest winners on the market in recent years. By allowing for scalability, ease of use, and better functionality, cloud computing companies have seen tremendous growth as businesses continue to move their IT needs onto the cloud. As a result, software-as-a-service (SaaS) stocks have surged in recent years and cloud infrastructure providers like Amazon.com and Microsoft have also seen a significant tailwind. The chart below shows the massive returns that some SaaS stocks — including Shopify (NYSE:SHOP), Alteryx (NYSE:AYX), and The Trade Desk (NASDAQ:TTD) — have delivered in the last few years. All three of these stocks have trounced the market and delivered incredible returns. For beginning investors, however, cloud stocks aren’t the most user-friendly. Often, these companies compete in niche corners of the IT world and offer services tailored to IT managers, meaning uninitiated investors may struggle with some of the language and terms these companies use to describe their business and performance. To get a sense of the strength of a given cloud stock, investors can start by examining three key industry metrics.To measure growth from existing customers, SaaS companies use a metric called dollar-based net retention, also called net dollar retention or dollar-based net expansion. This number, expressed as a percentage, shows how much of a company’s existing customer base is spending from one year to the next. For example, Okta ( NASDAQ:OKTA), a SaaS company that specializes in identity and security, reported 117% dollar-based net retention in its most recent report, meaning sales to its previously existing customer base grew 17% over last year’s sales. Slack (NYSE:WORK), the popular workplace-messaging platform, posted 134% dollar-based net retention in its most recent quarter, showing it grew revenue 34% from its existing customer base. Using those two numbers alone, you can see that Slack is doing a better job of growing revenue from its current subscriber base. Not surprisingly, its overall revenue growth of 60% was also better than Okta’s at 45% in their respective quarters. SaaS investors will want to make sure that any net dollar retention rate is above 100%, meaning that the company is growing existing customer relationships, preferably with a solid margin of safety.