Short Pitch: Asymmetric large-cap short. Leader in physical document storage and related services – a melting ice cube with high leverage trading at all-time highs. The core business is in secular decline, so further pricing increases are unlikely (already 2-3x more expensive than private comps), with limited additional cost-cutting opportunities. New Data Centers business is unlikely to move the needle.
Valuation: IRM trades at peak 16xEBITDA multiple. Wth 12x 2022E core storage business EBITDA (roughly where the business traded pre-DC) and 5x the Data Center business EBITDA (2-3 turn discount to comps due to smaller scale, balance sheet risk, lower margins) would be at $30/share.
Exp.gain: 35% to $30/share.
Full IRM write-up (free guest account required):