Why Iron Mountain (IRM) Stock Is Up Today

NEW YORK (TheStreet) -- Iron Mountain (IRM) was gaining 8.2% to $29.99 Wednesday following a positive research note from analyst firm Piper Jaffray.

Piper Jaffray said the IRS and Department of Treasury are proposing changes to the regulations that design "real property" for REIT conversions and eligibility following a proposed rulemaking notice published by the U.S. Federal Register. The firm Iron Mountain's racking structures may be able to be classified as qualifying "structural components" under the proposed changes.

In the note Piper Jaffray reiterated its "overweight" rating on Iron Mountain with a $37 price target.

Must read: Warren Buffett's 10 Favorite Growth Stocks

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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Separately, TheStreet Ratings team rates IRON MOUNTAIN INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate IRON MOUNTAIN INC (IRM) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, growth in earnings per share and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Services & Supplies industry. The net income increased by 114.9% when compared to the same quarter one year prior, rising from $19.39 million to $41.67 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 3.8%. Since the same quarter one year prior, revenues slightly increased by 3.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • IRON MOUNTAIN INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, IRON MOUNTAIN INC reported lower earnings of $0.51 versus $1.05 in the prior year. This year, the market expects an improvement in earnings ($1.07 versus $0.51).
  • The gross profit margin for IRON MOUNTAIN INC is rather high; currently it is at 56.48%. Regardless of IRM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 5.41% trails the industry average.
  • IRM's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 31.40%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it is one of the factors that makes this stock an attractive investment.
  • You can view the full analysis from the report here: IRM Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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