Jim Cramer, host of CNBC's Mad Money, declared Iron Mountain Incorporated (NYSE: IRM) an "incredible stock" and a potential buy, despite the shares trading approximately 20 points below their recent highs. During the September 17 lightning round, Cramer highlighted the company’s status as a real estate investment trust (REIT) with a 3% yield, suggesting the current pullback represents an entry point for investors seeking exposure to its expanding data center and physical storage businesses.

Market Context

Iron Mountain’s shares have faced recent pressure, driven by broader market profit-taking in premium-valued real estate equities. The stock currently trades at an elevated forward multiple of 58.14x, a valuation that requires continuous growth in cash flow generation to sustain. While the broader market has seen volatility in high-multiple names, IRM’s core business model remains rooted in durable physical records management and secure document destruction, providing a baseline of reliable cash flow that distinguishes it from pure-play speculative tech assets.

Analysis

The bullish thesis rests on Iron Mountain’s successful pivot into higher-growth segments, particularly data centers. In the second quarter, the data center segment posted a 39% revenue growth, securing 110 megawatts in new leases through July and increasing power capacity in major enterprise markets. This expansion complements the core physical storage business, which saw storage rental revenue expand 11.5% year-over-year (excluding FX effects) across a global customer base of 240,000.

However, this growth comes with significant capital intensity. Rapid buildouts of data center power capacity demand substantial capital expenditure, leading to elevated leverage. Long-term debt, net of the current portion, reached approximately $17.1 billion at the end of the second quarter, increasing the company’s sensitivity to interest rate fluctuations and refinancing costs. Institutional sentiment appears cautious but stable; Insider Monkey data shows 39 hedge funds held positions in IRM at the end of the second quarter, down slightly from 40 funds in the preceding quarter. Short interest remains low at 2.95% of the public float, indicating minimal bearish pressure from short sellers.

Key Numbers

- Q2 Total Revenue: $2.03 billion (up 18.7% year-over-year; 16.8% organic growth)

- Adjusted Funds From Operations (AFFO): $432.7 million, or $1.44 per share (up 17%)

- Data Center Segment Revenue Growth: 39% in Q2

- New Data Center Leases: 110 megawatts secured through July

- Quarterly Dividend: $0.864 per share (forward yield >3%)

- Long-Term Debt: ~$17.1 billion (net of current portion)

- Forward P/E Multiple: 58.14x

- Short Interest: 2.95% of public float

What to Watch

Traders should monitor upcoming Federal Reserve interest rate decisions, as IRM's $17.1 billion debt load makes the stock highly sensitive to shifts in monetary policy and refinancing costs. Key technical levels to watch include the recent high from which the stock has drawn down approximately 20 points; a sustained break below this support could signal further downside momentum. Additionally, keep an eye on the next earnings report for confirmation of data center lease momentum and whether the 58.14x forward multiple can be justified by continued double-digit growth in Adjusted Funds From Operations.