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Iron Mountain (IRM) Down 3.6% Since Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Iron Mountain Incorporated (IRM - Free Report) . Shares have lost about 3.6% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is IRM due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Recent Earnings
Iron Mountain reported fourth-quarter 2017 normalized funds from operations (FFO) of 53 cents per share that missed the Zacks Consensus Estimate of 57 cents. However, the figure increased 6% year over year.
Adjusted earnings increased 12% year over year to 29 cents.
Quarter Details
Revenues of $991 million beat the Zacks Consensus Estimate of $964.8 million and improved 6.1% year over year. At constant currency (cc), revenues grew 4.1% from the year-ago quarter.
Storage revenues (61.9% of total revenues) increased 6.5% at cc to $567 million. Internal growth was 4.2% year over year.
Iron Mountain generated 46.1% of storage revenues from the developed markets (North America Records and Information management, North America Data Management and Western Europe) and 12.9% from Other International markets (emerging markets, Australia and New Zealand).
In developed markets storage internal growth was 3.4%. In Other International markets storage internal growth was 6.8% year over year. Internal storage rental grew 9% in emerging markets.
Service (38.1% of total revenues) inched up 0.4% to $368 million. However, internal growth declined 0.1% year over year. In developed markets, service internal growth and Other International markets growth was 0.1% and 0.2%, respectively.
Adjusted gross margin expanded 130 basis points (bps) on a year-over-year basis to 56.2%.
Moreover, adjusted EBITDA margin improved 120 bps to 31.7%. Year-over-year growth was driven by robust performance from North Records and Information management (RIM), Western Europe and Global Data Center, which surged 240 bps, 570 bps and 240 bps, respectively.
Guidance
For 2018, Iron Mountain expects revenues between $4.160 and $4.260 billion, reflecting 7-9% growth over 2017.
Adjusted EBITDA is expected in the range of $1.435-$1.485 billion, representing growth of 12-16%. Adjusted FFO is anticipated to be in the range of $805-$865 million.
Internal storage rental growth rate expectation for 2018 is expected in the range of 3-3.5%. Total internal revenue growth is expected in the range of 2-3%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There have been two revisions lower for the current quarter. In the past month, the consensus estimate has shifted downward by 6.1% due to these changes.
Currently, IRM has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is equally suitable for growth and momentum investors while value investors may want to look elsewhere.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. It's no surprise IRM has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Iron Mountain (IRM) Down 3.6% Since Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Iron Mountain Incorporated (IRM - Free Report) . Shares have lost about 3.6% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is IRM due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Recent Earnings
Iron Mountain reported fourth-quarter 2017 normalized funds from operations (FFO) of 53 cents per share that missed the Zacks Consensus Estimate of 57 cents. However, the figure increased 6% year over year.
Adjusted earnings increased 12% year over year to 29 cents.
Quarter Details
Revenues of $991 million beat the Zacks Consensus Estimate of $964.8 million and improved 6.1% year over year. At constant currency (cc), revenues grew 4.1% from the year-ago quarter.
Storage revenues (61.9% of total revenues) increased 6.5% at cc to $567 million. Internal growth was 4.2% year over year.
Iron Mountain generated 46.1% of storage revenues from the developed markets (North America Records and Information management, North America Data Management and Western Europe) and 12.9% from Other International markets (emerging markets, Australia and New Zealand).
In developed markets storage internal growth was 3.4%. In Other International markets storage internal growth was 6.8% year over year. Internal storage rental grew 9% in emerging markets.
Service (38.1% of total revenues) inched up 0.4% to $368 million. However, internal growth declined 0.1% year over year. In developed markets, service internal growth and Other International markets growth was 0.1% and 0.2%, respectively.
Adjusted gross margin expanded 130 basis points (bps) on a year-over-year basis to 56.2%.
Moreover, adjusted EBITDA margin improved 120 bps to 31.7%. Year-over-year growth was driven by robust performance from North Records and Information management (RIM), Western Europe and Global Data Center, which surged 240 bps, 570 bps and 240 bps, respectively.
Guidance
For 2018, Iron Mountain expects revenues between $4.160 and $4.260 billion, reflecting 7-9% growth over 2017.
Adjusted EBITDA is expected in the range of $1.435-$1.485 billion, representing growth of 12-16%. Adjusted FFO is anticipated to be in the range of $805-$865 million.
Internal storage rental growth rate expectation for 2018 is expected in the range of 3-3.5%. Total internal revenue growth is expected in the range of 2-3%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There have been two revisions lower for the current quarter. In the past month, the consensus estimate has shifted downward by 6.1% due to these changes.
Iron Mountain Incorporated Price and Consensus
Iron Mountain Incorporated Price and Consensus | Iron Mountain Incorporated Quote
VGM Scores
Currently, IRM has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is equally suitable for growth and momentum investors while value investors may want to look elsewhere.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. It's no surprise IRM has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.