Iron Mountain Stock Up 10.6% in Six Months: Will the Trend Last?

Iron Mountain Incorporated IRM shares have risen 10.6% in the past six months against the industry’s fall of 5.2%.

Strong cash flows in the storage and records management business and a focus on the data center business are upsides for Iron Mountain. Also, strategic acquisitions supplement organic growth.

Last month, the company reported second-quarter adjusted funds from operations (AFFO) per share of $1.24, beating the Zacks Consensus Estimate of $1.19. This figure jumped 14.8% year over year. Results reflected solid performances across all business segments. However, higher interest expenses in the quarter undermined the performance to an extent.

Analysts seem bullish on this Zacks Rank #3 (Hold) stock. The Zacks Consensus Estimate for 2025 AFFO per share has been revised 1.6% northward to $5.09 over the past month.

Factors Behind IRM Stock’s Price Surge

Iron Mountain enjoys a steady stream of recurring revenues from its core storage and records management businesses. The company derives a majority of its revenues from fixed periodic (usually earned on a monthly basis) storage rental fees charged to customers based on the volume of their records stored. Its retention rate for its records management business was 93% in the second quarter of 2025.

Iron Mountain is supplementing its storage segment’s performance with expansion in its faster-growing businesses, most notably the data center segment. It is making organic growth efforts, along with expansion projects and developments. In the second quarter of 2025, the company attained data center revenue growth of 24%. During the same period, Iron Mountain had a total data center operating portfolio of 450 MW, which was 96% leased. For 2025, management expects Data Center revenues of nearly $800 million, which is approaching 30% growth.

Iron Mountain has an aggressive expansion strategy, which includes acquisitions and developments, to supplement organic growth in storage revenues. Moreover, the company is focusing on capital recycling by monetizing non-core assets, and entering into joint ventures and sale-leaseback transactions, using sale proceeds to fund the development pipeline. Such moves highlight the company’s prudent capital management practices and relieve the pressure on its balance sheet.

Iron Mountain maintains a strong balance sheet position. It had a weighted-average maturity of 4.5 years as of June 30, 2025. With this, it has ample financial flexibility to meet its near-term debt obligations and other capital commitments while pursuing growth opportunities. Iron Mountain ended the second quarter of 2025 with a net lease-adjusted leverage of 5.0X, the lowest level since before the company’s REIT conversion in 2014.

Solid dividend payouts are arguably the biggest enticements for REIT shareholders, and Iron Mountain remains committed to that. In February 2025, concurrent with its fourth-quarter 2024 earnings release, it announced a 10.6% hike in its cash dividend to 78.5 cents per share from 71.5 cents paid out earlier. Given its healthy operating platform, our year-over-year AFFO growth projections of 11.9% for 2025 and solid financial position, the increased dividend is likely to be sustainable in the forthcoming period.

Key Concerns for Iron Mountain

Competition from other industry players is likely to lead to aggressive pricing pressure and hurt Iron Mountain’s prospects. High interest expenses and adverse foreign currency movements remain a concern.

Stocks to Consider

Some better-ranked stocks from the broader REIT sector are VICI Properties VICI and Terreno Realty TRNO, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for VICI Properties’ 2025 FFO per share has been raised marginally over the past month to $2.39.

The consensus estimate for TRNO’s 2025 FFO per share has been revised upward marginally to $2.61 over the past month.

Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.

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This article originally published on Zacks Investment Research (zacks.com).

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