Intrinsic value of Iron Mountain - IRM

Previous Close

$36.08

  Intrinsic Value

$31.51

stock screener

  Rating & Target

hold

-13%

Previous close

$36.08

 
Intrinsic value

$31.51

 
Up/down potential

-13%

 
Rating

hold

Our model is not good at valuating stocks of financial companies, such as IRM.

We calculate the intrinsic value of IRM stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 9.6

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  9.50
  9.05
  8.64
  8.28
  7.95
  7.66
  7.39
  7.15
  6.94
  6.74
  6.57
  6.41
  6.27
  6.14
  6.03
  5.93
  5.83
  5.75
  5.68
  5.61
  5.55
  5.49
  5.44
  5.40
  5.36
  5.32
  5.29
  5.26
  5.24
  5.21
Revenue, $m
  4,211
  4,592
  4,990
  5,403
  5,832
  6,279
  6,743
  7,225
  7,727
  8,248
  8,789
  9,353
  9,939
  10,550
  11,186
  11,849
  12,540
  13,262
  14,014
  14,800
  15,621
  16,479
  17,376
  18,314
  19,296
  20,323
  21,398
  22,524
  23,703
  24,938
Variable operating expenses, $m
  2,306
  2,466
  2,631
  2,804
  2,984
  3,170
  3,364
  3,565
  3,775
  3,993
  3,672
  3,907
  4,152
  4,407
  4,673
  4,950
  5,239
  5,540
  5,854
  6,183
  6,526
  6,884
  7,259
  7,651
  8,061
  8,490
  8,939
  9,409
  9,902
  10,418
Fixed operating expenses, $m
  1,087
  1,111
  1,136
  1,161
  1,186
  1,212
  1,239
  1,266
  1,294
  1,323
  1,352
  1,382
  1,412
  1,443
  1,475
  1,507
  1,540
  1,574
  1,609
  1,644
  1,680
  1,717
  1,755
  1,794
  1,833
  1,874
  1,915
  1,957
  2,000
  2,044
Total operating expenses, $m
  3,393
  3,577
  3,767
  3,965
  4,170
  4,382
  4,603
  4,831
  5,069
  5,316
  5,024
  5,289
  5,564
  5,850
  6,148
  6,457
  6,779
  7,114
  7,463
  7,827
  8,206
  8,601
  9,014
  9,445
  9,894
  10,364
  10,854
  11,366
  11,902
  12,462
Operating income, $m
  818
  1,016
  1,222
  1,438
  1,662
  1,896
  2,140
  2,394
  2,657
  2,932
  3,766
  4,064
  4,375
  4,700
  5,038
  5,392
  5,761
  6,147
  6,551
  6,973
  7,415
  7,878
  8,362
  8,870
  9,402
  9,959
  10,544
  11,158
  11,801
  12,477
EBITDA, $m
  2,303
  2,585
  2,881
  3,188
  3,508
  3,842
  4,189
  4,550
  4,925
  5,316
  5,723
  6,147
  6,589
  7,049
  7,530
  8,031
  8,554
  9,101
  9,672
  10,269
  10,894
  11,548
  12,232
  12,948
  13,699
  14,485
  15,310
  16,174
  17,080
  18,030
Interest expense (income), $m
  0
  380
  426
  472
  521
  571
  624
  678
  735
  794
  855
  918
  985
  1,053
  1,125
  1,199
  1,277
  1,358
  1,442
  1,530
  1,622
  1,718
  1,818
  1,923
  2,032
  2,147
  2,267
  2,392
  2,523
  2,661
  2,805
Earnings before tax, $m
  437
  590
  750
  917
  1,091
  1,273
  1,462
  1,659
  1,864
  2,078
  2,847
  3,080
  3,322
  3,575
  3,839
  4,115
  4,403
  4,705
  5,021
  5,351
  5,697
  6,059
  6,439
  6,837
  7,255
  7,693
  8,152
  8,634
  9,141
  9,672
Tax expense, $m
  118
  159
  202
  248
  295
  344
  395
  448
  503
  561
  769
  832
  897
  965
  1,037
  1,111
  1,189
  1,270
  1,356
  1,445
  1,538
  1,636
  1,739
  1,846
  1,959
  2,077
  2,201
  2,331
  2,468
  2,611
Net income, $m
  319
  431
  547
  669
  797
  929
  1,067
  1,211
  1,361
  1,517
  2,079
  2,248
  2,425
  2,610
  2,803
  3,004
  3,215
  3,435
  3,665
  3,906
  4,159
  4,423
  4,701
  4,991
  5,296
  5,616
  5,951
  6,303
  6,673
  7,061

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  12,032
  13,121
  14,256
  15,436
  16,664
  17,940
  19,266
  20,644
  22,076
  23,564
  25,112
  26,723
  28,398
  30,143
  31,961
  33,855
  35,830
  37,890
  40,041
  42,286
  44,632
  47,083
  49,646
  52,326
  55,130
  58,065
  61,137
  64,354
  67,723
  71,253
Adjusted assets (=assets-cash), $m
  12,032
  13,121
  14,256
  15,436
  16,664
  17,940
  19,266
  20,644
  22,076
  23,564
  25,112
  26,723
  28,398
  30,143
  31,961
  33,855
  35,830
  37,890
  40,041
  42,286
  44,632
  47,083
  49,646
  52,326
  55,130
  58,065
  61,137
  64,354
  67,723
  71,253
Revenue / Adjusted assets
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
Average production assets, $m
  9,379
  10,227
  11,112
  12,032
  12,989
  13,983
  15,017
  16,091
  17,207
  18,367
  19,574
  20,829
  22,135
  23,495
  24,912
  26,388
  27,928
  29,534
  31,210
  32,960
  34,788
  36,699
  38,696
  40,786
  42,971
  45,259
  47,653
  50,161
  52,787
  55,538
Working capital, $m
  -316
  -344
  -374
  -405
  -437
  -471
  -506
  -542
  -579
  -619
  -659
  -701
  -745
  -791
  -839
  -889
  -941
  -995
  -1,051
  -1,110
  -1,172
  -1,236
  -1,303
  -1,374
  -1,447
  -1,524
  -1,605
  -1,689
  -1,778
  -1,870
Total debt, $m
  7,886
  8,747
  9,644
  10,578
  11,549
  12,558
  13,607
  14,697
  15,830
  17,007
  18,232
  19,506
  20,831
  22,211
  23,649
  25,147
  26,709
  28,339
  30,040
  31,816
  33,672
  35,611
  37,638
  39,758
  41,976
  44,297
  46,727
  49,272
  51,937
  54,729
Total liabilities, $m
  9,518
  10,379
  11,276
  12,210
  13,181
  14,190
  15,239
  16,329
  17,462
  18,639
  19,864
  21,138
  22,463
  23,843
  25,281
  26,779
  28,341
  29,971
  31,672
  33,448
  35,304
  37,243
  39,270
  41,390
  43,608
  45,929
  48,359
  50,904
  53,569
  56,361
Total equity, $m
  2,515
  2,742
  2,979
  3,226
  3,483
  3,749
  4,027
  4,315
  4,614
  4,925
  5,248
  5,585
  5,935
  6,300
  6,680
  7,076
  7,488
  7,919
  8,368
  8,838
  9,328
  9,840
  10,376
  10,936
  11,522
  12,136
  12,778
  13,450
  14,154
  14,892
Total liabilities and equity, $m
  12,033
  13,121
  14,255
  15,436
  16,664
  17,939
  19,266
  20,644
  22,076
  23,564
  25,112
  26,723
  28,398
  30,143
  31,961
  33,855
  35,829
  37,890
  40,040
  42,286
  44,632
  47,083
  49,646
  52,326
  55,130
  58,065
  61,137
  64,354
  67,723
  71,253
Debt-to-equity ratio
  3.140
  3.190
  3.240
  3.280
  3.320
  3.350
  3.380
  3.410
  3.430
  3.450
  3.470
  3.490
  3.510
  3.530
  3.540
  3.550
  3.570
  3.580
  3.590
  3.600
  3.610
  3.620
  3.630
  3.640
  3.640
  3.650
  3.660
  3.660
  3.670
  3.680
Adjusted equity ratio
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  319
  431
  547
  669
  797
  929
  1,067
  1,211
  1,361
  1,517
  2,079
  2,248
  2,425
  2,610
  2,803
  3,004
  3,215
  3,435
  3,665
  3,906
  4,159
  4,423
  4,701
  4,991
  5,296
  5,616
  5,951
  6,303
  6,673
  7,061
Depreciation, amort., depletion, $m
  1,485
  1,570
  1,658
  1,750
  1,846
  1,945
  2,049
  2,156
  2,268
  2,384
  1,957
  2,083
  2,214
  2,350
  2,491
  2,639
  2,793
  2,953
  3,121
  3,296
  3,479
  3,670
  3,870
  4,079
  4,297
  4,526
  4,765
  5,016
  5,279
  5,554
Funds from operations, $m
  1,804
  2,000
  2,206
  2,420
  2,643
  2,875
  3,116
  3,367
  3,628
  3,900
  4,036
  4,331
  4,639
  4,959
  5,294
  5,643
  6,007
  6,388
  6,786
  7,202
  7,638
  8,093
  8,570
  9,070
  9,593
  10,142
  10,716
  11,319
  11,951
  12,614
Change in working capital, $m
  -27
  -29
  -30
  -31
  -32
  -33
  -35
  -36
  -38
  -39
  -41
  -42
  -44
  -46
  -48
  -50
  -52
  -54
  -56
  -59
  -62
  -64
  -67
  -70
  -74
  -77
  -81
  -84
  -88
  -93
Cash from operations, $m
  1,832
  2,029
  2,236
  2,451
  2,675
  2,908
  3,151
  3,403
  3,666
  3,940
  4,077
  4,373
  4,683
  5,005
  5,341
  5,693
  6,059
  6,442
  6,843
  7,261
  7,699
  8,158
  8,637
  9,140
  9,667
  10,219
  10,797
  11,404
  12,040
  12,707
Maintenance CAPEX, $m
  -856
  -938
  -1,023
  -1,111
  -1,203
  -1,299
  -1,398
  -1,502
  -1,609
  -1,721
  -1,837
  -1,957
  -2,083
  -2,214
  -2,350
  -2,491
  -2,639
  -2,793
  -2,953
  -3,121
  -3,296
  -3,479
  -3,670
  -3,870
  -4,079
  -4,297
  -4,526
  -4,765
  -5,016
  -5,279
New CAPEX, $m
  -814
  -849
  -884
  -920
  -957
  -995
  -1,034
  -1,074
  -1,116
  -1,160
  -1,207
  -1,255
  -1,306
  -1,360
  -1,417
  -1,476
  -1,539
  -1,606
  -1,676
  -1,750
  -1,828
  -1,911
  -1,998
  -2,089
  -2,186
  -2,287
  -2,395
  -2,507
  -2,626
  -2,751
Cash from investing activities, $m
  -1,670
  -1,787
  -1,907
  -2,031
  -2,160
  -2,294
  -2,432
  -2,576
  -2,725
  -2,881
  -3,044
  -3,212
  -3,389
  -3,574
  -3,767
  -3,967
  -4,178
  -4,399
  -4,629
  -4,871
  -5,124
  -5,390
  -5,668
  -5,959
  -6,265
  -6,584
  -6,921
  -7,272
  -7,642
  -8,030
Free cash flow, $m
  161
  242
  329
  419
  515
  615
  719
  828
  941
  1,059
  1,033
  1,161
  1,294
  1,432
  1,575
  1,725
  1,881
  2,043
  2,213
  2,390
  2,575
  2,768
  2,970
  3,181
  3,402
  3,634
  3,877
  4,131
  4,397
  4,677
Issuance/(repayment) of debt, $m
  842
  861
  897
  934
  971
  1,009
  1,049
  1,090
  1,133
  1,178
  1,224
  1,274
  1,326
  1,380
  1,438
  1,498
  1,562
  1,630
  1,701
  1,776
  1,855
  1,939
  2,027
  2,120
  2,218
  2,321
  2,430
  2,545
  2,665
  2,792
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  842
  861
  897
  934
  971
  1,009
  1,049
  1,090
  1,133
  1,178
  1,224
  1,274
  1,326
  1,380
  1,438
  1,498
  1,562
  1,630
  1,701
  1,776
  1,855
  1,939
  2,027
  2,120
  2,218
  2,321
  2,430
  2,545
  2,665
  2,792
Total cash flow (excl. dividends), $m
  1,003
  1,104
  1,226
  1,353
  1,486
  1,624
  1,768
  1,917
  2,073
  2,236
  2,258
  2,435
  2,619
  2,812
  3,013
  3,223
  3,443
  3,673
  3,914
  4,166
  4,430
  4,707
  4,997
  5,301
  5,621
  5,955
  6,307
  6,675
  7,063
  7,469
Retained Cash Flow (-), $m
  -218
  -228
  -237
  -247
  -257
  -267
  -277
  -288
  -299
  -311
  -324
  -337
  -350
  -365
  -380
  -396
  -413
  -431
  -449
  -469
  -490
  -512
  -536
  -560
  -586
  -613
  -642
  -672
  -704
  -738
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  31
  34
  37
  40
  43
  47
  50
  54
  58
  62
  66
  70
  75
  80
  84
  89
  95
  100
  106
  112
  118
  125
  132
  139
  147
  154
  163
  171
  180
  190
Cash available for distribution, $m
  786
  876
  989
  1,106
  1,229
  1,357
  1,491
  1,629
  1,774
  1,925
  1,934
  2,098
  2,269
  2,447
  2,633
  2,827
  3,030
  3,243
  3,465
  3,697
  3,940
  4,195
  4,462
  4,741
  5,034
  5,342
  5,665
  6,003
  6,358
  6,731
Discount rate, %
  9.80
  10.29
  10.80
  11.34
  11.91
  12.51
  13.13
  13.79
  14.48
  15.20
  15.96
  16.76
  17.60
  18.48
  19.40
  20.37
  21.39
  22.46
  23.58
  24.76
  26.00
  27.30
  28.67
  30.10
  31.61
  33.19
  34.85
  36.59
  38.42
  40.34
PV of cash for distribution, $m
  715
  720
  727
  720
  700
  669
  628
  580
  525
  467
  379
  327
  276
  228
  184
  146
  112
  85
  62
  44
  31
  21
  14
  9
  5
  3
  2
  1
  1
  0
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Iron Mountain Incorporated, together with its subsidiaries, provides storage and information management services in North America, Europe, Latin America, and the Asia Pacific. It operates through North American Records and Information Management Business, North American Data Management Business, Western European Business, and Other International Business segments. The company provides storage and information management services for physical records and other media, such as microfilm and microfiche, master audio and videotapes, film, X-rays, and blueprints, including healthcare information services, vital records services, and service and courier operations, as well as the collection, handling, disposal of sensitive documents for corporate customers. It also offers information destruction services primarily consist of physical secure shredding operations; document management solutions to develop, implement, and support storage and information management solutions for the complete lifecycle of its customers' information; fulfillment services; technology escrow services that protect and manage source code; and professional consulting services, as well as sells resultant waste paper to third-party recyclers. In addition, the company is involved in the storage and rotation of backup computer media operations, including records management, data protection and recovery, server and computer backup services, and digital content repository systems to house, distribute, and archive key media assets, as well as for storage, safeguarding, and electronic or physical delivery of physical media primarily for the entertainment and media industry clients. It serves commercial, legal, banking, healthcare, accounting, insurance, entertainment, and government organizations. Iron Mountain Incorporated was founded in 1951 and is headquartered in Boston, Massachusetts.

FINANCIAL RATIOS  of  Iron Mountain (IRM)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

IRM stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the IRM stock intrinsic value calculation we used $3846 million for the last fiscal year's total revenue generated by Iron Mountain. The default revenue input number comes from 2017 income statement of Iron Mountain. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our IRM stock valuation model: a) initial revenue growth rate of 9.5% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 9.8%, whose default value for IRM is calculated based on our internal credit rating of Iron Mountain, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Iron Mountain.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of IRM stock the variable cost ratio is equal to 56%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1064 million in the base year in the intrinsic value calculation for IRM stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Iron Mountain.

Corporate tax rate of 27% is the nominal tax rate for Iron Mountain. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the IRM stock is equal to 0.8%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for IRM are equal to 222.7%.

Life of production assets of 10 years is the average useful life of capital assets used in Iron Mountain operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for IRM is equal to -7.5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $2297 million for Iron Mountain - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 266 million for Iron Mountain is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Iron Mountain at the current share price and the inputted number of shares is $9.6 billion.

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