Iron Mountain Inc. (NYSE: IRM) is set to report first quarter 2014 results on May 1. Last quarter, it posted a 31.8% negative surprise. We note that Iron Mountain has lagged the Zacks Consensus Estimate in the preceding four quarters with an average negative surprise of 11.7%.
Let's see how things are shaping up for this announcement.
Growth Factors This Past Quarter
Iron Mountain's strong product portfolio, increasing market share and promising international business are the primary growth catalysts for the company. The company's decision to convert to Real Estate Investment Trust (REIT) to reduce tax burden and increase shareholder value are the other positives. Moreover, the company's entry into the data center market could act as a positive factor.
However, costs related to conversion and fluctuations in recycled paper prices are the near-term headwinds for the company. Moreover, volatile foreign exchange rates and competition from Guidance Software Inc. (NASDAQ: GUID), Pitney Bowes Inc (NYSE: PBI) and Cintas Corp. (NASDAQ: CTAS) are the other headwinds.
Earnings Whispers?
Our proven model does not conclusively show that Iron Mountain is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Zacks ESP: The Most Accurate estimate stands at 26 cents and coincides with the Zacks Consensus Estimate. Hence, the difference is of 0.00%.
Zacks Rank #3 (Hold): Iron Mountain's Zacks Rank #3 when combined with a 0.00% ESP makes surprise prediction difficult.
We caution against stocks with Zacks Ranks #4 and #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
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