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Iron Mountain Incorporated (IRM) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Iron Mountain Incorporated (IRM)

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Intrinsic Value (DCF)

Current$92.67
→
Intrinsic$47.30
-49%
$14.82$47.30$108.97
Market implies 28% growth for 5 years
Current price reflects execution expectations above 18% growth — not unreasonable for quality businesses.
At $93, the market prices in continued strong cash flow growth (28%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $15 → Bull $109. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →14%16%18%20%
8%$69$80$91$103
10%$32$40$47$55
12%$12$18$23$29
14%$0$4$8$13

Bull Case

  • Bull case ($109) offers 18% upside at 22% growth, 9% discount

Bear Case

  • Bear case ($15) implies 84% downside at 15% growth, 12% discount
  • Price reflects 28% growth expectations vs 18% historical — high bar to clear
  • Trading 49% above base case — execution must exceed assumptions to justify
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5-Year FFO Projection

Year 1$1.31B
Year 2$1.55B
Year 3$1.83B
Year 4$2.16B
Year 5$2.55B
Terminal$37.56B

📐 Model Inputs

Growth Rate18.2%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base FFO$1.11BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. Uses FFO per NAREIT standards. See FAQ below for full methodology.

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Frequently Asked Questions

Is IRM stock undervalued or overvalued?
🔴 OVERVALUED

IRM trades at $92.67 vs. our DCF-derived intrinsic value of $47.30, implying -44% downside. Using a 10.0% WACC and 18.2% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($96.98) suggests limited upside.

What is IRM's intrinsic value?

Using a 5-year DCF model: Base FCF of $1.11B, projected at 18.2% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $16.21B net debt and dividing by 0.30B shares: Bear $13.13 | Base $47.30 | Bull $96.98. Current price $92.67 implies -44% to base case.

How is IRM's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 18.2% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($30.22B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 27.3x.