A month has gone by since the last earnings report for Iron Mountain (IRM). Shares have added about 1.2% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Iron Mountain due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Iron Mountain's Q3 AFFO Beat Estimates, Revenues Rise Y/Y

Iron Mountain reported third-quarter 2024 AFFO per share of $1.13, beating the Zacks Consensus Estimate of $1.11.

Results reflected solid performances in the storage and service segments and the data center business. However, higher interest expenses in the quarter acted as a dampener. The company reaffirmed its outlook for 2024.

Quarterly total revenues of $1.56 billion surpassed the Zacks Consensus Estimate by just 0.06%.

On a year-over-year basis, AFFO per share and total revenues increased 10.8% and 12.2%, respectively.

According to William L. Meaney, president and CEO of Iron Mountain, “We are pleased to report a very strong third quarter and continued strong momentum in the second half of 2024, resulting in all-time record Revenue, Adjusted EBITDA, and AFFO.”

Behind the Headlines

Storage rental revenues were $935.7 million in the third quarter, up 9% year over year. We had estimated quarterly storage rental revenues to be $935.6 million.

Service revenues increased 17.4% from the prior-year quarter to $621.7 million.

The Global Data Center business reported revenues of $153.2 million in the third quarter, rising 20.1% year over year. Our estimate was pegged at $156 million.

The adjusted EBITDA rose 13.6% year over year to $568.1 million. The adjusted EBITDA margin came at 36.5%, increasing 50 basis points year over year.

However, interest expenses flared up 21.8% year over year to $186.1 million in the quarter. We projected the metric to be $178 million.

Balance-Sheet Position

Iron Mountain exited the third quarter with $168.5 million of cash and cash equivalents, up from $144.3 million as of June 30, 2024.

2024 Guidance

Iron Mountain reaffirmed its guidance for 2024 and now expects to be on track to achieve the upper end of the 2024 guidance range.

It expects AFFO per share between $4.39 and $4.51.

Revenues are estimated to be in the range of $6.00-$6.15 billion, while adjusted EBITDA is anticipated to be $2.175-$2.225 billion.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month.

VGM Scores

At this time, Iron Mountain has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Iron Mountain has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Iron Mountain belongs to the Zacks REIT and Equity Trust - Other industry. Another stock from the same industry, American Tower (AMT), has gained 5.7% over the past month. More than a month has passed since the company reported results for the quarter ended September 2024.

American Tower reported revenues of $2.52 billion in the last reported quarter, representing a year-over-year change of -10.5%. EPS of $0.89 for the same period compares with $2.58 a year ago.

For the current quarter, American Tower is expected to post earnings of $2.36 per share, indicating a change of +3.1% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.7% over the last 30 days.

American Tower has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.

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