It's been a good week for Iron Mountain Incorporated (NYSE:IRM) shareholders, because the company has just released its latest yearly results, and the shares gained 6.6% to US$34.60. Revenues were US$4.1b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$1.19, an impressive 126% ahead of estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Iron Mountain

Taking into account the latest results, the consensus forecast from Iron Mountain's eight analysts is for revenues of US$4.32b in 2021, which would reflect a satisfactory 4.2% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to dive 39% to US$0.72 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$4.28b and earnings per share (EPS) of US$1.01 in 2021. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$31.38, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Iron Mountain analyst has a price target of US$38.00 per share, while the most pessimistic values it at US$16.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Iron Mountain's revenue growth will slow down substantially, with revenues next year expected to grow 4.2%, compared to a historical growth rate of 6.5% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.5% per year. Factoring in the forecast slowdown in growth, it seems obvious that Iron Mountain is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Iron Mountain. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Iron Mountain analysts - going out to 2023, and you can see them free on our platform here.

It is also worth noting that we have found 4 warning signs for Iron Mountain (1 is a bit unpleasant!) that you need to take into consideration.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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