Iron Mountain (IRM) To Report Q3 Earnings: What's In Store?

Iron Mountain Inc. (NYSE:IRM) , a leading provider of data protection and information management services, is set to release its third-quarter 2016 results on Nov 1. Last quarter, the company delivered a negative earnings surprise of 11.32%. It has posted an average negative earnings surprise of 2.24% over the past four quarters.

Let’s see how things are shaping up for this announcement.

Factors to Consider

Iron Mountain’s diversified revenue base remains a positive. In addition, a strong product portfolio, increasing market share, an aggressive acquisition strategy and a promising international business are the other growth catalysts.

In Aug 2016, the company announced the buyout of information management operations of Santa Fe Group A/S in 10 regions in both Europe and Asia. The deal values the operations at nearly $30.2 million. This apart, in the last quarter, the company had declared that the synergies from the Recall acquisition are being achieved faster than expected. Management said that it expects to achieve over 80% of the synergies expected from Recall by 2017, this year itself. It also reiterated its long-term goals. Moreover, the company’s entry into the data center market could be another growth driver.

This apart, a highly-leveraged balance sheet, volatile currency environment and competition from the likes of Cintas Corporation (NASDAQ:CTAS) and others remain overhangs.

Earnings Whispers

Our proven model does not conclusively show that Iron Mountain is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below

Zacks ESP: Iron Mountain’s Earnings ESP is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 58 cents.

Zacks Rank: Iron Mountain’s Zacks Rank #2 when combined with a 0.00% ESP, makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are a couple of stocks that you may consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

NN Inc. (NASDAQ:NNBR) has an Earnings ESP of +4.35% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Mercadolibre, Inc. (NASDAQ:MELI) with an Earnings ESP of +8.24% and a Zacks Rank #1

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