Iron Mountain Incorporated (IRM) — Valuation Snapshot

Iron Mountain Incorporated (IRM) is a real-estate investment trust, and a free-cash-flow discounted-cash-flow (DCF) model is structurally the wrong lens for one. A REIT's reported free cash flow is swamped by property depreciation and the continuous capital spending that maintaining a portfolio requires, which is why the industry is valued on funds from operations (FFO/AFFO), net asset value and dividend yield instead. We have the data to print a DCF number for IRM; we don't publish one because it would not mean what it appears to mean. What follows is how a REIT is actually read — descriptive, not a valuation, and not investment advice.

On the numbers we do have, IRM trades at a recent price of $110.85, a market capitalisation of about $33,014,876,160, sitting 58% of the way up its 52-week range ($77.77–$134.68), on the NYSE.

The standard alternative to a DCF is relative valuation — comparing IRM's trading multiples against a sector benchmark. Here that gives P/E of 72.5× (richer than the peer median of 28.0×); Fwd P/E of 40.8× (richer than the peer median of 36.2×); P/S of 4.2× (cheaper than the peer median of 10.3×); EV/EBITDA of 20.3× (in line with the peer median of 19.9×); Dividend yield of 3.6% (in line with the peer median of 3.8%). A cheaper multiple than peers can flag a discount or a market that expects weaker growth; it is a comparison, not a recommendation.

Finally, a price-based read — explicitly not a valuation. IRM is in a down-trend (price below both its 50- and 200-day averages), trading -17.7% from its 52-week high. Over the past year the stock is +4.1%. Moving-average trend and 52-week position describe where the stock has traded; they say nothing about what it is worth.

To be exact about what this page is not: we are not saying the numbers for IRM are unavailable. They are, and they are above. We are saying a discounted-cash-flow model is the wrong instrument for this kind of business, and publishing one anyway — because the inputs happen to exist — would be a precise answer to the wrong question. Refusing is the more useful answer, and it is the same rule we apply to every name in this category.