Iron Mountain Inc. (IRM), based in Boston, Massachusetts, is a leading provider of information protection and storage services in North America, Latin America, Europe and the Pacific Rim. We remain encouraged by the strength of the company's information protection and storage services business, which reported its 79th consecutive quarter of increased revenues in the third quarter.

However, Iron Mountain lowered its guidance for fiscal 2008 due to significant strengthening of the U.S. dollar against the major currencies. The company's preliminary guidance for fiscal 2009 is also disappointing. While positive on the stock, we have concerns regarding the high valuation and dependence on large acquisitions for growth. We therefore maintain our Hold recommendation on the shares.

Iron Mountain is currently trading at a P/E multiple of 28.0x our 2009 earnings estimate of $0.82, representing a large premium to the industry mean and the S&P. On a P/S ratio, the stock is trading at 1.4x our 2009 sales estimate of $16.05 per share, also representing a premium to its industry mean and median.

As long as the company continues to perform at a high level, we believe the shares can maintain their current valuation, and perhaps increase slightly, but we would not chase the stock at current levels. Our six-month price target is $24, which represents a P/S multiple of 1.5x our 2009 sales estimate, the high-end of its peer group range.

Anita Mohata contributed to the report.