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

Core Insights - Iron Mountain Incorporated (IRM) shares have increased by 10.6% over the past six months, contrasting with a 5.2% decline in the industry [1][8] - The company benefits from strong cash flows in its storage and records management business, alongside a focus on the data center business, which supports growth [1][5] - Strategic acquisitions are being utilized to supplement organic growth [1][6] Financial Performance - In the second quarter, Iron Mountain reported adjusted funds from operations (AFFO) per share of $1.24, exceeding the Zacks Consensus Estimate of $1.19, and reflecting a year-over-year increase of 14.8% [2] - The company achieved a retention rate of 93% in its records management business during the second quarter of 2025 [4] - The Zacks Consensus Estimate for 2025 AFFO per share has been revised upward by 1.6% to $5.09 [3] Business Segments - The storage and records management business generates a steady stream of recurring revenues, primarily from monthly storage rental fees [4] - Data center revenues grew by 24% in Q2 2025, with a total operating portfolio of 450 MW that was 96% leased, and management anticipates nearly 30% growth in data center revenues for 2025 [5][8] Expansion Strategy - Iron Mountain is pursuing an aggressive expansion strategy that includes acquisitions and developments to enhance organic growth in storage revenues [6] - The company is also focusing on capital recycling through monetizing non-core assets and engaging in joint ventures and sale-leaseback transactions [6][9] Financial Health - As of June 30, 2025, Iron Mountain maintained a strong balance sheet with a weighted-average maturity of 4.5 years and a net lease-adjusted leverage of 5.0X, the lowest since its REIT conversion in 2014 [10] - The company announced a 10.6% increase in its cash dividend to 78.5 cents per share, supported by healthy operating performance and projected AFFO growth of 11.9% for 2025 [11]