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Iron Mountain Stock Rallies 22.5% in Three Months: Will This Continue?
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Key Takeaways
IRM stock surged 22.5% over three months, outpacing the industry's 1.5% decline.
Data center revenues rose 20.3% in Q1 2025, supporting Iron Mountain's growth diversification.
IRM raised its dividend by 10.6% in February, backed by strong AFFO growth and financial flexibility.
Iron Mountain Incorporated (IRM - Free Report) shares have rallied 22.5% in the past three months, against the industry’s fall of 1.5%.
Iron Mountain is well-poised to gain from strong cash flows in the storage and records management business and a focus on the data center business. Also, strategic acquisitions supplement organic growth. A healthy balance sheet is likely to support the company’s growth endeavors.
Analysts also seem bullish on this Zacks Rank #2 (Buy) stock. The Zacks Consensus Estimate for 2025 adjusted funds from operations (AFFO) per share has been revised one cent upward to $4.93 over the past week.
Image Source: Zacks Investment Research
Factors Behind the Surge in IRM Stock Price: Will This Last?
Iron Mountain enjoys a steady stream of recurring revenues from its core storage and records management businesses. The company derives a majority of its revenues from fixed periodic (usually earned on a monthly basis) storage rental fees charged to customers based on the volume of their records stored. Its retention rate for its records management business was 92.9% in the first quarter of 2025.
Iron Mountain is supplementing its storage segment’s performance with expansion in its faster-growing businesses, most notable being the data center segment. It is making organic growth efforts, along with expansion projects and developments. In the first quarter of 2025, the company attained data center revenue growth of 20.3%.
Iron Mountain has an aggressive expansion strategy, which includes acquisitions and developments, to supplement organic growth in storage revenues. Moreover, the company is focusing on capital recycling by monetizing non-core assets and entering into joint ventures and sale-leaseback transactions, using sale proceeds to fund the development pipeline. Such moves highlight the company’s prudent capital management practices and relieve the pressure on its balance sheet.
Iron Mountain’s healthy balance sheet position, along with ample financial flexibility, has enabled it to capitalize on long-term growth opportunities. IRM had total liquidity of approximately $2.1 billion as of March 31, 2025, with net lease-adjusted leverage of 5.0X, the lowest level since before the company’s REIT conversion in 2014.
Solid dividend payouts are arguably the biggest enticements for REIT shareholders, and Iron Mountain remains committed to that. In February 2025, concurrent with its fourth-quarter 2024 earnings release, it announced a 10.6% hike in its cash dividend to 78.5 cents per share from 71.5 cents paid out earlier. Given its healthy operating platform, our year-over-year AFFO growth projections of 9.6% for 2025 and solid financial position, the increased dividend is likely to be sustainable in the forthcoming period.
Key Concerns for Iron Mountain
Competition from other industry players is likely to lead to aggressive pricing pressure and hurt Iron Mountain’s prospects. High interest expenses and adverse foreign currency movements remain a concern.
Image: Shutterstock
Iron Mountain Stock Rallies 22.5% in Three Months: Will This Continue?
Key Takeaways
Iron Mountain Incorporated (IRM - Free Report) shares have rallied 22.5% in the past three months, against the industry’s fall of 1.5%.
Iron Mountain is well-poised to gain from strong cash flows in the storage and records management business and a focus on the data center business. Also, strategic acquisitions supplement organic growth. A healthy balance sheet is likely to support the company’s growth endeavors.
Analysts also seem bullish on this Zacks Rank #2 (Buy) stock. The Zacks Consensus Estimate for 2025 adjusted funds from operations (AFFO) per share has been revised one cent upward to $4.93 over the past week.
Image Source: Zacks Investment Research
Factors Behind the Surge in IRM Stock Price: Will This Last?
Iron Mountain enjoys a steady stream of recurring revenues from its core storage and records management businesses. The company derives a majority of its revenues from fixed periodic (usually earned on a monthly basis) storage rental fees charged to customers based on the volume of their records stored. Its retention rate for its records management business was 92.9% in the first quarter of 2025.
Iron Mountain is supplementing its storage segment’s performance with expansion in its faster-growing businesses, most notable being the data center segment. It is making organic growth efforts, along with expansion projects and developments. In the first quarter of 2025, the company attained data center revenue growth of 20.3%.
Iron Mountain has an aggressive expansion strategy, which includes acquisitions and developments, to supplement organic growth in storage revenues. Moreover, the company is focusing on capital recycling by monetizing non-core assets and entering into joint ventures and sale-leaseback transactions, using sale proceeds to fund the development pipeline. Such moves highlight the company’s prudent capital management practices and relieve the pressure on its balance sheet.
Iron Mountain’s healthy balance sheet position, along with ample financial flexibility, has enabled it to capitalize on long-term growth opportunities. IRM had total liquidity of approximately $2.1 billion as of March 31, 2025, with net lease-adjusted leverage of 5.0X, the lowest level since before the company’s REIT conversion in 2014.
Solid dividend payouts are arguably the biggest enticements for REIT shareholders, and Iron Mountain remains committed to that. In February 2025, concurrent with its fourth-quarter 2024 earnings release, it announced a 10.6% hike in its cash dividend to 78.5 cents per share from 71.5 cents paid out earlier. Given its healthy operating platform, our year-over-year AFFO growth projections of 9.6% for 2025 and solid financial position, the increased dividend is likely to be sustainable in the forthcoming period.
Key Concerns for Iron Mountain
Competition from other industry players is likely to lead to aggressive pricing pressure and hurt Iron Mountain’s prospects. High interest expenses and adverse foreign currency movements remain a concern.
Other Stocks to Consider
Some other top-ranked stocks from the broader REIT sector are VICI Properties (VICI - Free Report) and W.P. Carey (WPC - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for VICI Properties’ 2025 FFO per share has been raised marginally over the past two months to $2.34.
The consensus estimate for W.P. Carey’s current-year FFO per share has moved northward 1.2% in the past two months to $4.88.
Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.