It hasn't been a great morning session for Iron Mountain investors, who have watched their shares sink by -1.2% to a price of $122.14. Some of you might be wondering if it's time to buy the dip. If you are considering this, make sure to check the company's fundamentals first to determine if the shares are fairly valued at today's prices.
Iron Mountain's Valuation Is in Line With Its Sector Averages:
Iron Mountain Incorporated (NYSE: IRM) is a global leader in information management services. The company belongs to the Real Estate sector, which has an average price to earnings (P/E) ratio of 31.12. In contrast, Iron Mountain has a trailing 12 month P/E ratio of 339.3 based on its earnings per share of $0.36.
Iron Mountain has moved 86.8% over the last year compared to 32.0% for the S&P 500 -- a difference of 54.8%. Iron Mountain has a 52 week high of $130.24 and a 52 week low of $64.66.
Increasing Revenues but Narrowing Margins:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $1,603 | $4,263 | $4,147 | $4,492 | $5,104 | $5,480 |
| Operating Margins | 50% | 18% | 23% | 19% | 21% | 17% |
| Net Margins | 22% | 6% | 8% | 10% | 11% | 3% |
| Net Income (M) | $355 | $268 | $343 | $453 | $562 | $187 |
| Net Interest Expense (M) | -$410 | -$419 | -$419 | -$418 | -$488 | -$586 |
| Depreciation & Amort. (M) | $453 | $456 | $448 | $465 | $479 | $526 |
| Diluted Shares (M) | 287 | 288 | 289 | 291 | 292 | 294 |
| Earnings Per Share | $1.23 | $0.93 | $1.19 | $1.55 | $1.9 | $0.63 |
| EPS Growth | n/a | -24.39% | 27.96% | 30.25% | 22.58% | -66.84% |
| Avg. Price | $24.53 | $25.58 | $23.42 | $38.04 | $47.12 | $121.88 |
| P/E Ratio | 19.78 | 27.51 | 19.68 | 24.38 | 24.54 | 193.46 |
| Free Cash Flow (M) | $475 | $274 | $549 | $148 | $52 | -$226 |
| CAPEX (M) | $460 | $693 | $438 | $611 | $875 | $1,339 |
| EV / EBITDA | 18.13 | 19.14 | 17.03 | 21.71 | 22.55 | 40.66 |
| Total Debt (M) | $16,033 | $16,551 | $17,019 | $17,925 | $20,963 | $23,625 |
| Net Debt / EBITDA | 12.58 | 13.22 | 12.16 | 13.39 | 13.62 | 16.17 |
| Current Ratio | 0.81 | 0.63 | 0.64 | 0.71 | 0.81 | 0.78 |
Iron Mountain suffers from weak operating margins with a negative growth trend, declining EPS growth, and positive cash flows. The firm's financial statements also exhibit not enough current assets to cover current liabilities because its current ratio is 0.78 and a highly leveraged balance sheet. On the other hand, the company has rapidly growing revenues and increasing reinvestment in the business working in its favor.
