Iron Mountain stock price forms a bullish pattern ahead of earnings

Iron Mountain stock price has fired on all cylinders for years, making it one of the best-performing players in the real estate investment trust (REIT). Excluding dividends, the Iron Mountain share price has surged by over 6,000% since going public in 1998. It has beaten the S&P 500 and Nasdaq 100 indices. So, can it continue its rally in the long term?

Why Iron Mountain stock has surged

Iron Mountain is a top company in the technology industry. It provides the infrastructure that big technology companies need to do their business. For example, Iron Mountain is one of the top owners of data centers globally, with locations in almost all continents.

Iron Mountain also offers cybersecurity solutions, asset lifecycle management, records and information management, and warehousing and logistics. 

Its business has been in high demand in the past few years as companies have boosted their data investments. The biggest American companies are expected to spend over $320 billion in data centers, with some of these funds flowing to firms like Iron Mountain and other data center companies. 

Iron Mountain’s business has done well as its annual revenue has jumped from $4.26 billion in 2019 to $5.98 billion in the trailing twelve months (TTM). This growth may continue in the coming months as data center demand remains high. 

IRM earnings ahead

The next important catalyst for the Iron Mountain stock price will be its earnings, which are set to happen on Thursday. These numbers will provide more information about its performance and whether data center demand is rising. 

As a recap, the most recent results showed that its revenue rose to $1.6 billion in the third quarter, representing a 12% annual growth rate. Its adjusted funds from operations, a figure that looks at its free cash flow, the most important metric in REITs, rose to $322 million, while its adjusted EBITDA was $568 million. 

The company’s guidance was that its full-year revenue would be about $6.1 billion, while its adjusted EBITDA was $2.2 billion. The AFFO and AFFO per share will be $.133 billion and $4.5. Iron Mountain will likely do better than its estimates as it has done many times before. 

Investors' main concern is that the company may struggle when data center demand falls. Given DeepSeek's recent progress, investors anticipate that the sector may see weak demand.

The other key issue is that Iron Mountain stock is highly expensive. Iron Mountain has trailing price-to-adjusted funds from operations metric of 24, higher than the sector median of 14. The forward P/AFFO metric of 23.52 is also higher than the sector median of 12.

Iron Mountain stock price analysis

IRM chart by TradingView

The weekly chart shows that the IRM share price has pulled back from the year-to-date high of $129.21 to the current $106. It has remained slightly above the 50-week Exponential Moving Average (EMA). 

Further, the Iron Mountain share price has formed a falling wedge chart pattern. It has also formed a bullish flag chart pattern, a popular continuation sign. 

Therefore, the IRM stock price will likely have a strong bullish breakout, with the next point to watch being at $120, up by 13% above the current level. A drop below the lower side of the wedge at $96 will point to more downside.