Elon Musk may have singled out Iron Mountain (IRM) as an example of government inefficiency, but analysts reckon last week’s pullback in the stock is a reason to buy. Shares of IRM fell around 10% last week after Musk mentioned the company during a rant about how his DOGE department was seeking to root out inefficient spending.
Discover the Best Stocks and Maximize Your Portfolio:
- See what stocks are receiving strong buy ratings from top-rated analysts.
- Filter, analyze, and streamline your search for investment opportunities with TipRanks’ Stock Screener.
“There’s a limestone mine where we store all the retirement paperwork…This mine looks like something out of the ’50s, because it was started in 1955, so it looks like it’s, like, a time warp,” he said.
Musk went on to explain that the speed of the mine’s elevator determines the speed at which the government can process data. “Doesn’t that sound crazy?” he asked, raising fears that IRM could be a become a target for DOGE, the newly-created Department of Government Efficiency.
Shares took a hit on the remarks and fell again Thursday as revenues in its Fiscal fourth quarter came in below expectations. IRM collects, stores and manage data, offering secure cloud and physical storage to thousands of companies globally, as well as government agencies.
Analysts Still say Buy IRM
Nevertheless, Wells Fargo analyst Eric Luebchow reckons IRM remains a good pick. He has a Buy rating on the stock and $125 price target. “IRM earnings checked a lot of boxes,” he said in a note reported by CNBC, suggesting that it had also “calmed nerves” around DOGE. The analyst also noted a strong data center pipeline.
Meanwhile, Stifel analyst Shlomo Rosenbaum reiterated his Buy rating on the stock and $140 Street high price target.
Earlier, IRM CEO Bill Meaney had said DOGE was actually a “growth opportunity” for the company, noting that its digitizing arm could help with the “drive to be more efficient” within the federal government.
Meaney said IRM earns $130 million in revenue from its data center and digitization transformation businesses, against just $10 million from storing physical documents for the government at sites like its namesake Iron Mountain facility in Pennsylvania.
Is IRM a Good Stock to Buy?
Overall, Wall Street has a Strong Buy consensus rating on IRM, based on four Buys assigned in the last three months. The average IRM price target of $133.50 implies nearly 40% upside.
