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Why Is Iron Mountain (IRM) Down 6% Since the Last Earnings Report?
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It has been about a month since the last earnings report for Iron Mountain Incorporated (IRM - Free Report) . Shares have lost nearly 6% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Iron Mountain Q4 FFO Beats, Initiates 2017 Guidance
Iron Mountain reported fourth-quarter 2016 normalized funds from operations (FFO) of $0.50 per share that beat the Zacks Consensus Estimate of $0.45 but fell 12.3% year over year.
Revenues of $934.2 million missed the Zacks Consensus Estimate of $938.3 million and improved 24.2% year over year. Storage revenues were up 23.8% to $566.5 million while Service revenues grew 24.8% to $367.6 million. The company achieved internal storage rental growth of 2.9%.
The company reported adjusted EBITDA of $296.5 million compared with $237.7 million in the year-ago quarter.
Operating expenses increased 26.3% year over year to $794.7 million. Operating income in the quarter increased 13.1% from the year-ago quarter to $139.5 million. However, operating margin was down 150 basis points (bps) to 14.9%.
Balance Sheet
Iron Mountain exited the quarter with cash and cash equivalents of $236.5 million compared with $128.4 million as of Dec 31, 2015. Long-term debt was $6.1 billion compared with $4.8 billion as of Dec 31, 2015.
Outlook
For 2017, the company expects adjusted EBITDA to be in a range of $1,250 - $1,280 million, representing growth of 16% to 19%. Revenues are expected to be in a range of $3,750 million - $3,840 million, implying a growth rate of 8% to 10% year over year. Adjusted FFO is expected to be in a range of $715 million to $760 million.
Internal storage rental growth rate is expected to be 2% to 2.5% in 2017. CapEx along with non-real estate investments are projected to be in a bracket of $150 million - $170 million
Management expects to achieve $80 million of the synergies from Recall acquisition in 2017.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. There has been one revision higher for the current quarter compared to three lower. In the past month, the consensus estimate has shifted lower by 10.2% due to these changes.
At this time, Iron Mountain's stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, that the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
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Why Is Iron Mountain (IRM) Down 6% Since the Last Earnings Report?
It has been about a month since the last earnings report for Iron Mountain Incorporated (IRM - Free Report) . Shares have lost nearly 6% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Iron Mountain Q4 FFO Beats, Initiates 2017 Guidance
Iron Mountain reported fourth-quarter 2016 normalized funds from operations (FFO) of $0.50 per share that beat the Zacks Consensus Estimate of $0.45 but fell 12.3% year over year.
Revenues of $934.2 million missed the Zacks Consensus Estimate of $938.3 million and improved 24.2% year over year. Storage revenues were up 23.8% to $566.5 million while Service revenues grew 24.8% to $367.6 million. The company achieved internal storage rental growth of 2.9%.
The company reported adjusted EBITDA of $296.5 million compared with $237.7 million in the year-ago quarter.
Operating expenses increased 26.3% year over year to $794.7 million. Operating income in the quarter increased 13.1% from the year-ago quarter to $139.5 million. However, operating margin was down 150 basis points (bps) to 14.9%.
Balance Sheet
Iron Mountain exited the quarter with cash and cash equivalents of $236.5 million compared with $128.4 million as of Dec 31, 2015. Long-term debt was $6.1 billion compared with $4.8 billion as of Dec 31, 2015.
Outlook
For 2017, the company expects adjusted EBITDA to be in a range of $1,250 - $1,280 million, representing growth of 16% to 19%. Revenues are expected to be in a range of $3,750 million - $3,840 million, implying a growth rate of 8% to 10% year over year. Adjusted FFO is expected to be in a range of $715 million to $760 million.
Internal storage rental growth rate is expected to be 2% to 2.5% in 2017. CapEx along with non-real estate investments are projected to be in a bracket of $150 million - $170 million
Management expects to achieve $80 million of the synergies from Recall acquisition in 2017.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. There has been one revision higher for the current quarter compared to three lower. In the past month, the consensus estimate has shifted lower by 10.2% due to these changes.
Iron Mountain Incorporated Price and Consensus
Iron Mountain Incorporated Price and Consensus | Iron Mountain Incorporated Quote
VGM Scores
At this time, Iron Mountain's stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, that the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.