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Iron Mountain (IRM) to Post Q2 Earnings: What's in Store?
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Iron Mountain Inc. (IRM - Free Report) is set to release second-quarter 2018 results on Jul 27, before the market opens. The company’s results will likely reflect year-over-year growth in revenues and a decline in funds from operations (FFO) per share.
In the last reported quarter, this real estate investment trust’s (REIT) normalized FFO of 49 cents per share lagged the Zacks Consensus Estimate by a cent. Revenues of $1.04 billion beat the Zacks Consensus Estimate of nearly $1.03 billion and improved 11% year over year.
Over the preceding four quarters, the company missed the FFO per share estimates in three occasions and beat in the other, resulting in an average negative surprise of 1.26%. This is depicted in the graph below:
Let’s see how things are shaping up prior to this announcement.
Factors to Consider
Data-center REITs are expected to have experienced a thriving market in the second quarter as well, with growth in cloud computing, Internet of Things and big data, and an increasing number of companies opting for third-party IT infrastructure.
Also, the estimated growth rates for the artificial intelligence, autonomous vehicle and virtual/augmented reality markets will remain robust over the next five-eight years. These factors, along with an improved outlook for economic growth, are anticipated to provide substantial growth impetus to data-center REITs, moving ahead. At such times, Iron Mountain’s business model focusing on expansion in fast growing markets bodes well.
Nonetheless, Iron Mountain’s Service top-line performance in the quarter to be reported is expected to reflect falling activity rates as stored records are becoming less active. Also, recycled paper prices continue to fall. While recovery is expected to be slow in the near term, achieving top-line targets remains a challenge. In fact, the Zacks Consensus Estimate for Q2 adjusted Service revenues of $385 million remained flat year over year.
The storage and information management services industry is highly fragmented with numerous competitors in North America and around the world. Iron Mountain faces significant competition in North America owing to the fragmentation of the storage and information management service industry. Thus, the company’s Q2 pricing power and margin growth performance will likely reflect its unfavorable impact.
Moreover, the Zacks Consensus Estimate for total revenues from its North America Records and Information Management business at $522 million reflects a decline of nearly 1% from the prior-quarter tally, while storage rentals from the data management business remain flat sequentially.
Further, there is lack of any solid catalyst prior to the second-quarter earnings release. As such, the Zacks Consensus Estimate of FFO per share for the quarter remained unchanged at 53 cents over the past month.
In the past three months, the company has underperformed the industry it belongs to. The stock has gained 3.5%, while the industry recorded growth of 9.4% during this time frame.
Earnings Whispers
Our proven model does not conclusively show that Iron Mountain is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen. That is not the case here, as you will see below.
(You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.)
Zacks ESP: Iron Mountain’s Earnings ESP is +3.77%.
Zacks Rank: Iron Mountain currently carries a Zacks Rank of 4 (Sell), which actually reduces the predictive power of ESP.
Stocks That Warrant a Look
While the other players in this space are lined up to report financial results, below are three stocks, poised to beat on earnings per the proven Zacks model. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ventas Inc. (VTR - Free Report) , slated to release April-June quarter results on Jul 27, has an Earnings ESP of +0.82% and a Zacks Rank of 3.
Vornado Realty Trust (VNO - Free Report) , scheduled to report Q2 earnings on Jul 30, has an Earnings ESP of +1.39% and a Zacks Rank #3.
HCP, Inc. (HCP - Free Report) , set to release second-quarter numbers on Aug 2, has an Earnings ESP of +0.66% and a Zacks Rank of 3.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Iron Mountain (IRM) to Post Q2 Earnings: What's in Store?
Iron Mountain Inc. (IRM - Free Report) is set to release second-quarter 2018 results on Jul 27, before the market opens. The company’s results will likely reflect year-over-year growth in revenues and a decline in funds from operations (FFO) per share.
In the last reported quarter, this real estate investment trust’s (REIT) normalized FFO of 49 cents per share lagged the Zacks Consensus Estimate by a cent. Revenues of $1.04 billion beat the Zacks Consensus Estimate of nearly $1.03 billion and improved 11% year over year.
Over the preceding four quarters, the company missed the FFO per share estimates in three occasions and beat in the other, resulting in an average negative surprise of 1.26%. This is depicted in the graph below:
Iron Mountain Incorporated Price and EPS Surprise
Iron Mountain Incorporated Price and EPS Surprise | Iron Mountain Incorporated Quote
Let’s see how things are shaping up prior to this announcement.
Factors to Consider
Data-center REITs are expected to have experienced a thriving market in the second quarter as well, with growth in cloud computing, Internet of Things and big data, and an increasing number of companies opting for third-party IT infrastructure.
Also, the estimated growth rates for the artificial intelligence, autonomous vehicle and virtual/augmented reality markets will remain robust over the next five-eight years. These factors, along with an improved outlook for economic growth, are anticipated to provide substantial growth impetus to data-center REITs, moving ahead. At such times, Iron Mountain’s business model focusing on expansion in fast growing markets bodes well.
Nonetheless, Iron Mountain’s Service top-line performance in the quarter to be reported is expected to reflect falling activity rates as stored records are becoming less active. Also, recycled paper prices continue to fall. While recovery is expected to be slow in the near term, achieving top-line targets remains a challenge. In fact, the Zacks Consensus Estimate for Q2 adjusted Service revenues of $385 million remained flat year over year.
The storage and information management services industry is highly fragmented with numerous competitors in North America and around the world. Iron Mountain faces significant competition in North America owing to the fragmentation of the storage and information management service industry. Thus, the company’s Q2 pricing power and margin growth performance will likely reflect its unfavorable impact.
Moreover, the Zacks Consensus Estimate for total revenues from its North America Records and Information Management business at $522 million reflects a decline of nearly 1% from the prior-quarter tally, while storage rentals from the data management business remain flat sequentially.
Further, there is lack of any solid catalyst prior to the second-quarter earnings release. As such, the Zacks Consensus Estimate of FFO per share for the quarter remained unchanged at 53 cents over the past month.
In the past three months, the company has underperformed the industry it belongs to. The stock has gained 3.5%, while the industry recorded growth of 9.4% during this time frame.
Earnings Whispers
Our proven model does not conclusively show that Iron Mountain is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen. That is not the case here, as you will see below.
(You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.)
Zacks ESP: Iron Mountain’s Earnings ESP is +3.77%.
Zacks Rank: Iron Mountain currently carries a Zacks Rank of 4 (Sell), which actually reduces the predictive power of ESP.
Stocks That Warrant a Look
While the other players in this space are lined up to report financial results, below are three stocks, poised to beat on earnings per the proven Zacks model. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ventas Inc. (VTR - Free Report) , slated to release April-June quarter results on Jul 27, has an Earnings ESP of +0.82% and a Zacks Rank of 3.
Vornado Realty Trust (VNO - Free Report) , scheduled to report Q2 earnings on Jul 30, has an Earnings ESP of +1.39% and a Zacks Rank #3.
HCP, Inc. (HCP - Free Report) , set to release second-quarter numbers on Aug 2, has an Earnings ESP of +0.66% and a Zacks Rank of 3.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>