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What's in Store for Iron Mountain (IRM) This Earnings Season?

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·5 min read
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Iron Mountain Incorporated IRM is set to release fourth-quarter and full-year 2021 results on Feb 24 before the bell. The company’s quarterly results are likely to display growth in both revenues and funds from operations (FFO) per share.

In the last reported quarter, this real estate investment trust (REIT) delivered a surprise of 2.86% in terms of adjusted FFO per share. Both service and storage segments put up a solid performance during the third quarter, while the data center business saw continued momentum.

Over the trailing four quarters, Iron Mountain surpassed the Zacks Consensus Estimate on each occasion, the average beat being 18.06%. The graph below depicts this surprise history:

Iron Mountain Incorporated Price and EPS Surprise

Iron Mountain Incorporated Price and EPS Surprise
Iron Mountain Incorporated Price and EPS Surprise

Iron Mountain Incorporated price-eps-surprise | Iron Mountain Incorporated Quote

Let’s see how things have shaped up before this announcement.

Factors to Note

A steady stream of recurring revenues from its core storage and record management businesses is expected to have aided IRM in the fourth quarter. This, along with the high box retention rate, is anticipated to have rendered storage rental revenue stability.

The consensus estimate for the same is pegged at $738 million for the fourth quarter, suggesting an improvement from the prior quarter’s $719 million and the year-ago period’s $697 million.

Moreover, the company’s quarterly results are likely to display modest improvements in core service revenues. The consensus estimate for fourth-quarter service revenues is pegged at $410 million. Although it indicates a slight decrease from the prior quarter’s $412 million, it calls for an increase from the year-ago quarter’s $362 million.

Demand for data center spaces has been spurred by the rising growth of data, rapid accelerations in cloud adoption and the boom in IT outsourcing demand. New technologies like 5G and augmented reality have been creating opportunities for edge deployments and data center operators. Strong demand for connectivity, interconnection and colocation spaces is anticipated to have driven the data center leasing activity for Iron Mountain. Amid the favorable backdrop, the company continued its portfolio expansion and data center enhancement efforts in the quarter under review, which must have driven revenues from the global data center business.

For the fourth quarter, management projected total revenues in the high-single-digit percentage range year over year, while for EBITDA, management expected the percentage growth between low double digits and low teens year over year. Further, management projected year-over-year adjusted FFO growth of more than 30% in the fourth quarter.

Overall, total revenues for the fourth quarter are pegged at $1.15 billion, suggesting a year-over-year increase of 8.37%.

Iron Mountain’s activities in the fourth quarter were inadequate to gain analysts’ confidence. The Zacks Consensus Estimate of 71 cents for quarterly FFO per share has been unrevised over the past month. However, the figure suggests year-over-year growth of 7.58%.

For full-year 2021, IRM projected adjusted FFO per share in the band of $3.33-$3.45. Revenues were estimated in the range of $4,415-$4,515 million, while adjusted EBITDA was predicted in the range of $1,600-$1,635 million.

For the full year, the Zacks Consensus Estimate for FFO per share has remained unrevised at $2.74 over the past month. Also, the figure indicates a 10.75% decrease year over year on revenues of $4.48 billion.

Here Is What Our Quantitative Model Predicts:

Our proven model does not conclusively predict a surprise in terms of FFO per share for Iron Mountain this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an FFO beat. However, that is not the case here.

Iron Mountain currently carries a Zacks Rank #3 and has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

Upcoming Releases

It’s time to look forward to the earnings releases of REITs, including American Tower Corporation AMT, Extra Space Storage Inc. EXR and SBA Communications Corporation SBAC.

American Tower is scheduled to report its numbers on Feb 24 and Extra Space Storage on Feb 23. SBA Communications is slated to release fourth-quarter 2021 results on Feb 28.

The Zacks Consensus Estimate for American Tower’s fourth-quarter 2021 FFO per share is pegged at $2.19, suggesting a year-over-year increase of 5.8%. AMT currently carries a Zacks Rank of 4 (Sell).

You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Extra Space Storage’s fourth-quarter 2021 FFO per share stands at $1.86, indicating a year-over-year increase of 25.7%. EXR currently has a Zacks Rank of 3.

The Zacks Consensus Estimate for SBA Communications’ fourth-quarter 2021 FFO per share is pegged at $2.80, implying a year-over-year increase of 12.45%. SBAC currently carries a Zacks Rank of 4.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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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American Tower Corporation (AMT) : Free Stock Analysis Report

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