Last Update 08 Dec 25

IRM: Digital And Data Center Expansion Will Drive Long-Term Compounding Despite Short Report

Analysts have nudged their blended price target on Iron Mountain modestly higher to about $117 per share, citing continued confidence in double digit growth, resilient data center and digital expansion, and recent supportive research that raised targets to the $120 to $125 range despite short seller noise.

Analyst Commentary

Recent Street commentary on Iron Mountain has been broadly supportive, with most research notes emphasizing resilient fundamentals, execution on growth initiatives, and a limited fundamental impact from recent short seller noise.

Overall, analysts continue to view the company as a durable compounder, with updated models and new coverage reinforcing confidence in management's strategy and the sustainability of double digit growth across newer business lines.

Bullish Takeaways

Bullish analysts highlight that the short report introduces no materially new information, reinforcing the view that the stock's long term growth thesis remains intact despite near term volatility.
Updated models following recent management meetings support incremental price target increases, suggesting potential upside if execution in data centers and digital solutions continues.
New coverage notes that the strategic transformation toward higher growth segments, including data centers, digital solutions, and asset lifecycle management, is accelerating the revenue mix shift and supporting a premium valuation.
The company's large and diversified customer base is seen as a structural advantage that can support cross selling into growth verticals and underpin expectations for sustained double digit growth.

Bearish Takeaways

Bearish analysts and short sellers point to modestly negative volume trends in the more mature North America physical storage business as a potential drag on legacy cash flows over time.
Some investors remain cautious that headline risk from public short reports could periodically pressure the multiple, even if fundamentals remain sound.
There is ongoing scrutiny around execution risk in scaling newer businesses, with concerns that any slowdown in growth or margin expansion could challenge the elevated valuation.

What's in the News

Short seller Gotham City Research claimed Iron Mountain manipulates adjusted leverage and EBITDA, calling the shares uninvestible and valuing them at $23 to $41 per share, which implies over 50% downside from current levels (Periodicals).
The company reiterated its guidance for the fourth quarter and full year 2025, targeting roughly 14% year over year revenue growth in the fourth quarter and about 12% growth at the midpoint for the full year, with expected 2025 revenue between $6.79 billion and $6.94 billion (Key Developments).
Iron Mountain declared a 10% increase in its quarterly cash dividend to $0.864 per share, payable January 6, 2026 to shareholders of record on December 15, 2025, which the company indicated reflects management's confidence in cash flow durability (Key Developments).
The company reported that it has completed repurchases totaling 37,720,590 shares, or 19.33% of shares, for about $1.13 billion under its long running buyback program announced in 2010, with no shares repurchased in the most recent quarter (Key Developments).

Valuation Changes

Fair Value Estimate has remained unchanged at approximately $116.73 per share, indicating no material shift in the model’s intrinsic value assessment.
Discount Rate has risen slightly from about 8.55% to roughly 8.60%, reflecting a modest uptick in the required return embedded in the valuation.
Revenue Growth has increased marginally from about 9.97% to approximately 9.99%, suggesting a slightly more optimistic outlook for top line expansion.
Net Profit Margin has edged down fractionally from about 8.25% to roughly 8.25% (8.245%), implying a negligible decrease in expected profitability levels.
Future P/E has ticked up modestly from about 61.69x to roughly 61.76x, pointing to a small increase in the multiple applied to forward earnings.

Growth in data center and digital solutions is driven by rising AI and cloud demand, regulatory compliance needs, and increased recurring, high-margin revenue.
Expansion into asset lifecycle management and investment in AI platforms enhances long-term growth prospects, margin improvement, and global market share.
Accelerating digitalization and rising competition challenge Iron Mountain's legacy business, data center growth, and margins, while elevated debt and compliance costs threaten financial stability and earnings quality.

Catalysts

About Iron Mountain

Iron Mountain Incorporated (NYSE: IRM) is trusted by more than 240,000 customers in 61 countries, including approximately 95% of the Fortune 1000, to help unlock value and intelligence from their assets through services that transcend the physical and digital worlds.What are the underlying business or industry changes driving this perspective?

Iron Mountain is seeing robust double-digit growth in its Data Center and Digital Solutions businesses, fueled by surging demand for AI, cloud infrastructure, and the management of complex unstructured data-these trends are expected to increase high-margin recurring revenue and drive earnings growth.
Increasing corporate and regulatory emphasis on data privacy, compliance, and risk management is boosting demand for secure records retention and end-to-end asset lifecycle services, providing stable, predictable revenue streams and supporting margin expansion.
The highly fragmented market for Asset Life Cycle Management and data center decommissioning presents a significant runway for further organic and cross-sell growth, as Iron Mountain leverages its global footprint and trusted reputation-which should support long-term revenue and EBITDA acceleration.
Continued investment in AI-powered digital platforms (such as the Insight Digital Experience Platform) positions Iron Mountain as a differentiated provider in digital workflow automation, enabling expansion of the total addressable market and supporting future margin improvement.
The company's strong pre-leased data center development pipeline in prime locations (Northern Virginia, Richmond, Amsterdam, etc.) and operational leverage are expected to yield accelerating revenue and margin gains as capacity comes online, with mid-to-high double-digit growth outlook supporting long-term earnings and cash flow.

Iron Mountain Earnings and Revenue Growth

Iron Mountain Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Iron Mountain's revenue will grow by 9.0% annually over the next 3 years.
Analysts assume that profit margins will increase from 0.6% today to 9.3% in 3 years time.
Analysts expect earnings to reach $775.8 million (and earnings per share of $2.02) by about September 2028, up from $41.3 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 55.9x on those 2028 earnings, down from 690.6x today. This future PE is greater than the current PE for the US Specialized REITs industry at 30.5x.
Analysts expect the number of shares outstanding to grow by 0.64% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.94%, as per the Simply Wall St company report.

Iron Mountain Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The accelerating shift toward digital transformation and paperless workflows may erode long-term demand for Iron Mountain's core legacy physical storage business, potentially leading to declining revenues from a segment currently highlighted as delivering mid-single-digit growth and record Q2 results.
Increased reliance on aggressive data center expansion for growth exposes Iron Mountain to infrastructure overbuild risk and rising competition, particularly from private capital-backed and hyperscale-focused REITs-which could compress net margins and increase debt loads, as the discussion revealed large pre-leasing but softer new signings and a guidance trim for new lease signings in 2025.
Elevated leverage and ongoing capital-intensive investments for data center and M&A activity (such as the acquisition in India and over $477 million in Q2 capital expenditures) increase Iron Mountain's sensitivity to higher interest rates and refinancing risks, potentially negatively impacting net income, cash flow, and long-term financial stability.
Greater regulatory scrutiny and increasing compliance requirements for both data privacy and environmental standards may drive up operating and capital costs (especially in secure destruction, chain-of-custody, and ESG-compliant decommissioning), compressing net margins, as Iron Mountain's emphasis on security and compliance is core to its value proposition.
The proliferation of specialized, tech-forward competitors in both the data center (hyperscale, retail, and edge-focused REITs) and digital solutions space (including native AI and workflow automation vendors) heightens pricing and innovation pressures, potentially constraining Iron Mountain's revenue growth rates and threatening earnings quality if integration across legacy and growth businesses underperforms.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $114.5 for Iron Mountain based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $140.0, and the most bearish reporting a price target of just $44.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $8.3 billion, earnings will come to $775.8 million, and it would be trading on a PE ratio of 55.9x, assuming you use a discount rate of 7.9%.
Given the current share price of $96.67, the analyst price target of $114.5 is 15.6% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

AI Demand And Data Center Expansion Will Transform Digital Workflows