Is Iron Mountain made of Paper?
Research 2.0, March 2008, Pages: 2
Research 2.0, along with many investors, thought that Iron Mountain (IRM--$25) was a pretty solid company with high recurring revenues and profits. After some digging, it turns out IRM is an overvalued business with fairly poor fundamentals. A charitable view might put IRM worth at $7B but long-term debt of $3.2B puts a damper on things. We’d suggest the shares are worth at most $19 using Research 2.0’s long-term valuation methodology. A less friendly analysis might highlight IRM’s additional $3B of long-term lease obligations and the possibility that its revenue growth and margins could deteriorate further.
“Is Iron Mountain made of Paper?”:
- Explores the notion that IRM is a fundamentally solid company to reveal an overvalued company with relatively poor fundamentals.
- Discusses the impact of IRM’s long-term debt obligations to future long-term valuation.
- Examines the costs of overhead and operations, both of which are outstripping revenue growth.
- Addresses the anticipated effect of digital information storage trends and potential acquisitions to IRM’s future earnings.
Products covered in this report include:
- Paper document storage
- Digital document storage
- Overview
- Valuation analysis
- Discussion
Tables and Charts:
- Figure 1: New Constructs’ Risk/Reward Rating
- Iron Mountain
- EMC
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