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Iron Mountain Stock Gains 20.9% in Three Months: Will the Trend Last?
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Key Takeaways
IRM stock gained 20.9% in three months, outperforming the industry's 6.4% increase.
Core storage and records management businesses' recurring revenues support IRM's growth.
Data center expansion strategy, capital recycling and ample liquidity bode well.
Iron Mountain Incorporated (IRM - Free Report) shares have gained 20.9% in the past three months compared with the industry’s upside of 6.4%.
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 two cents upward to $5.01 over the past two months.
Image Source: Zacks Investment Research
Let us decipher the possible factors behind the surge in the stock price.
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.
Iron Mountain is supplementing its storage segment’s performance with expansion in its faster-growing businesses, most notably the data center segment. It is making organic growth efforts, along with expansion projects and developments. Iron Mountain has a strong data center pipeline totaling 1.3 GW once fully developed. Due to the company’s strong pipeline, management expects to lease 125 MW for 2025.
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 maintains a healthy balance sheet position with ample financial flexibility to meet its near-term debt obligations and other capital commitments while pursuing 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. The company has a five-year annualized dividend growth rate of 4.73%. Given its healthy operating platform and solid financial position, the increased dividend is likely to be sustainable in the forthcoming period.
With the above-mentioned factors, we believe the rising trend in the stock is expected to continue in the near term.
Risks Likely to Affect IRM’s Positive Trend
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.
The Zacks Consensus Estimate for DLR’s 2025 FFO per share has moved a cent northward to $7.04 over the past week.
The Zacks Consensus Estimate for CUZ’s 2025 FFO per share has moved a cent northward to $2.80 over the past two months.
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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Iron Mountain Stock Gains 20.9% in Three Months: Will the Trend Last?
Key Takeaways
Iron Mountain Incorporated (IRM - Free Report) shares have gained 20.9% in the past three months compared with the industry’s upside of 6.4%.
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 two cents upward to $5.01 over the past two months.
Image Source: Zacks Investment Research
Let us decipher the possible factors behind the surge in the stock price.
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.
Iron Mountain is supplementing its storage segment’s performance with expansion in its faster-growing businesses, most notably the data center segment. It is making organic growth efforts, along with expansion projects and developments. Iron Mountain has a strong data center pipeline totaling 1.3 GW once fully developed. Due to the company’s strong pipeline, management expects to lease 125 MW for 2025.
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 maintains a healthy balance sheet position with ample financial flexibility to meet its near-term debt obligations and other capital commitments while pursuing 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. The company has a five-year annualized dividend growth rate of 4.73%. Given its healthy operating platform and solid financial position, the increased dividend is likely to be sustainable in the forthcoming period.
With the above-mentioned factors, we believe the rising trend in the stock is expected to continue in the near term.
Risks Likely to Affect IRM’s Positive Trend
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 include Digital Realty Trust (DLR - Free Report) and Cousins Properties (CUZ - 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 DLR’s 2025 FFO per share has moved a cent northward to $7.04 over the past week.
The Zacks Consensus Estimate for CUZ’s 2025 FFO per share has moved a cent northward to $2.80 over the past two months.
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.