Iron Mountain Incorporated IRM is slated to release fourth-quarter and full-year 2024 results on Feb. 13, before the opening bell. The quarterly results are likely to display year-over-year growth in revenues and adjusted funds from operations (AFFO) per share.

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In the last reported quarter, this real estate investment trust (REIT) delivered a surprise of 1.80% in terms of AFFO per share. 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.

Over the trailing four quarters, Iron Mountain’s AFFO per share surpassed the Zacks Consensus Estimate on all the occasions, the average beat being 3.54%. The graph below depicts this surprising history:

Iron Mountain Incorporated Price and EPS Surprise

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

Factors to Consider Ahead of IRM’s Q4 Results

In the fourth quarter, Iron Mountain is likely to have gained from its stable and resilient core storage and records management business. The company derives a majority of its revenues from fixed periodic (usually earned monthly) storage rental fees charged to customers based on the volume of their records stored.

Demand for Iron Mountain’s traditional services, which include charges for core service activities and a range of complementary products, is likely to have contributed positively to service revenue growth.

Additionally, strong demand for connectivity, interconnection and colocation space is likely to have spurred data center leasing activity. This growth might have bolstered the performance of Iron Mountain’s Global Data Center segment during the period.

However, higher interest rates might have posed challenges.

Projections for IRM

For the fourth quarter, the Zacks Consensus Estimate for storage rental revenues is pegged at $954.7 million, up 9.6% from $871.1 million in the year-ago period. The consensus estimate for service revenues is pegged at $647 million, up 17.9% from $548.7 million in the prior year quarter.

The consensus estimate for quarterly total revenues is pegged at $1.60 billion, suggesting an increase of 12.9% from the prior-year quarter’s reported figure.

We estimate fourth-quarter interest expenses to rise 15.9% on a year-over-year basis.

The company’s activities in the to-be-reported quarter were adequate to garner analysts’ confidence. The Zacks Consensus Estimate for the quarterly AFFO per share has been revised one cent northward to $1.20 over the past three months. The figure implies significant growth from the year-ago quarter’s reported number.

Full-Year 2024 Projections for IRM

For the full year 2024, IRM expected its AFFO per share in the band of $4.39-$4.51. The Zacks Consensus Estimate for the same stands at $4.51, indicating a significant increase year over year from $1.83 per share reported in the year ago quarter.

For the full year, the company expected its total revenues in the band of $6.00-$6.15 billion. The consensus estimate for the same stands at $6.17 billion, indicating a 12.6% increase year over year.

Here’s What Our Quantitative Model Predicts for IRM

Our proven model does not conclusively predict a surprise in terms of AFFO 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 chances of an FFO beat, which is not the case here.

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

Stocks That Warrant a Look

Here are two stocks from the broader REIT sector — Host Hotels & Resorts HST and CubeSmart CUBE — that you may want to consider, as our model shows that these have the right combination of elements to report a surprise this quarter.

Host Hotels & Resorts, scheduled to report quarterly numbers on Feb. 19, has an Earnings ESP of +1.53% and carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

CubeSmart, slated to release quarterly numbers on Feb. 27, has an Earnings ESP of +1.11% and carries a Zacks Rank of 3 at present.

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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