Should Iron Mountain Stock Be in Your Portfolio Ahead of Q4 Earnings?

Iron Mountain Incorporated IRM is slated to release fourth-quarter 2025 results on Feb. 12, 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.

In the last reported quarter, this real estate investment trust (REIT) delivered a surprise of 2.3% in terms of AFFO per share. Results reflected solid performances across all segments, including the storage, service, global RIM and data center businesses. Higher interest expenses in the quarter undermined the performance to an extent.

Over the trailing four quarters, Iron Mountain’s AFFO per share surpassed the Zacks Consensus Estimate on all occasions, the average beat being 2.68%. 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’s earnings are likely to have been supported by a stable base of recurring revenues from its core storage and records management businesses, which are expected to have driven overall revenue growth during the period.

Alongside its storage operations, Iron Mountain continues to strengthen performance through the expansion of its faster-growing segments, particularly data centers. Strong demand for connectivity, interconnection and colocation space is likely to have boosted leasing activity, supporting growth in the company’s global data center segment during the quarter.

The company’s aggressive expansion strategy, including acquisitions and development initiatives, is also expected to have complemented organic growth in storage revenues, aiding top-line performance in the reported period.

The elevated cost of sales and higher selling, general and administrative expenses stemming from international business expansion, along with increased interest expenses, are expected to have acted as headwinds to the quarterly performance.

Projections for IRM

The Zacks Consensus Estimate for storage rental revenues is pegged at $1.06 billion, up from $942 million reported in the year-ago period. The consensus estimate for service revenues stands at $745.3 million, up from $639.3 million reported in the prior-year quarter. The consensus estimate for its global data center segment stands at $230.1 million, up from $170.2 million reported in the year-ago period.

The consensus estimate for quarterly total revenues stands at $1.81 billion, suggesting an increase of 14.2% from the prior-year quarter’s reported figure.

For the fourth quarter, the company’s activities in the to-be-reported quarter were inadequate to garner analysts’ confidence. The Zacks Consensus Estimate for the quarterly AFFO per share has remained unchanged at $1.39 over the past three months. The figure implies significant growth from the year-ago quarter’s reported number.

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 — W.P. Carey WPC and Host Hotels & Resorts HST— you may want to consider, as our model shows that these have the right combination of elements to report a surprise this quarter.

W.P. Carey, scheduled to report quarterly numbers on Feb. 10, has an Earnings ESP of +1.06% and carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Host Hotels & Resorts, slated to release quarterly numbers on Feb. 18, has an Earnings ESP of +1.71% 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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This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research