Here's How Much a $1000 Investment in Iron Mountain Made 10 Years Ago Would Be Worth Today
For most investors, how much a stock's price changes over time is important. Not only can it impact your investment portfolio, but it can also help you compare investment results across sectors and industries.
The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.
What if you'd invested in Iron Mountain (IRM) ten years ago? It may not have been easy to hold on to IRM for all that time, but if you did, how much would your investment be worth today?
Iron Mountain's Business In-Depth
With that in mind, let's take a look at Iron Mountain's main business drivers.
Boston, MA-based Iron Mountain Incorporated provides records & information management services and data center space & solutions in 60 countries. The company started operating as a real estate investment trust (REIT) starting from taxable year ended Dec 31, 2014. This S&P 500 member serves more than 225,000 customers from various industries through around 1400 of its facilities.
The company primarily generates revenues from storage rental and services. Storage rental revenues are generated through periodic rental charges for data storage. Service revenues comprise charges for related core service activities and a wide array of complementary products and services.
The company’s reportable operating segments comprise (i) Global Records and Information Management (RIM) Business consisting of records management, data management, global digital solutions, secure shredding, secure IT asset disposition and consumer storage, (ii) Global Data Center Business and (iii) Corporate and Other Business.
Its Global Data Center Business provides enterprise-class data center facilities and hyperscale-ready capacity to protect mission-critical assets and ensure the continued operation of its customers’ IT infrastructure with secure, reliable and flexible data center options.
In January 2024, Iron Mountain acquired Regency Technologies for an initial purchase price of $200 million, of which $125 million was required to be paid at close and the remainder is due in 2025. The purchase price represents an EBITDA multiple of around 7.5X. The combined entity establishes a market-leading position in the IT asset disposition customer solutions and enhances Iron Mountain’s capabilities in Asset Lifecycle Management (ALM).
In September 2022, Iron Mountain launched Project Matterhorn, aiming to capture a higher share of the large, global addressable markets by investing 16% of its revenues (roughly $4 billion) over the next four years to accelerate its growth.
Note: All EPS numbers presented in this report represents funds from operations (FFO) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
Bottom Line
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Iron Mountain ten years ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in March 2014 would be worth $2,904.28, or a 190.43% gain, as of March 14, 2024. Investors should keep in mind that this return excludes dividends but includes price appreciation.
Compare this to the S&P 500's rally of 179.76% and gold's return of 51.16% over the same time frame.
Going forward, analysts are expecting more upside for IRM.
Iron Mountain is well-poised to benefit from its stable and resilient core storage and records management business. Going forward, healthy revenue management and volume trends are likely to continue aiding the company. A recurring revenue business model and a well-diversified tenant base assure steady cash flows. Iron Mountain’s accretive buyouts and expansion efforts into fast-growing businesses, like that of the data center, bode well for growth. A healthy balance sheet will likely support its growth endeavors. We expect an 11.4% year-over-year increase in total revenues for 2024. However, stiff competition from industry peers may lead to aggressive pricing pressure and lower margins, weighing on its profitability. High interest rates add to its concerns. For 2024, we estimate a 12.9% year-over-year rise in net interest expense.
The stock has jumped 18.58% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 5 higher, for fiscal 2024; the consensus estimate has moved up as well.
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Iron Mountain Incorporated (IRM) : Free Stock Analysis Report
