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Fortrea Holdings Inc. (FTRE)
NASDAQ:FTRE
US Market
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Fortrea Holdings Inc. (FTRE) AI Stock Analysis

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FTRE

Fortrea Holdings Inc.

(NASDAQ:FTRE)

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Neutral 53 (OpenAI - 4o)
Rating:53Neutral
Price Target:
$10.00
▲(19.05% Upside)
Fortrea Holdings Inc. faces significant financial challenges, particularly in profitability and cash flow, which weigh heavily on its overall score. While technical indicators show some positive momentum, the negative P/E ratio and lack of dividend yield are major valuation concerns. The earnings call provided mixed signals, with revenue growth overshadowed by substantial net losses.
Positive Factors
Revenue Growth
The 7.2% revenue growth demonstrates Fortrea's ability to expand its market presence and enhance its service offerings, which is crucial for long-term sustainability in the competitive healthcare sector.
Operational Efficiency
Improved operational efficiency, as evidenced by reduced DSO, enhances cash flow management and strengthens Fortrea's ability to invest in growth initiatives.
Innovation in Technology
The introduction of AI-powered Risk Radar positions Fortrea as a leader in clinical trial innovation, potentially attracting more clients and improving service quality.
Negative Factors
Net Loss and Goodwill Impairment
The significant net loss and goodwill impairment indicate financial strain, impacting Fortrea's ability to reinvest in growth and maintain competitive positioning.
Challenges in New Business Acquisition
Difficulties in acquiring new biotech business suggest potential market saturation or competitive pressures, which could hinder future revenue growth.
Leadership Transition Impact
The leadership transition has caused customer uncertainty, potentially affecting Fortrea's ability to secure new contracts and maintain client relationships.

Fortrea Holdings Inc. (FTRE) vs. SPDR S&P 500 ETF (SPY)

Fortrea Holdings Inc. Business Overview & Revenue Model

Company DescriptionFortrea Holdings Inc. (FTRE) operates in the healthcare sector, focusing on providing clinical trial solutions and laboratory services to pharmaceutical, biotechnology, and medical device companies. The company supports its clients in the development and approval of new medical treatments by offering comprehensive end-to-end clinical trial management services and advanced laboratory testing capabilities.
How the Company Makes MoneyFortrea Holdings Inc. generates revenue primarily through its clinical trial management and laboratory services. The company earns income by offering a suite of services that include clinical trial design, patient recruitment, data management, and regulatory compliance support. Additionally, Fortrea provides laboratory testing services that assist in the drug development process. Revenue streams are bolstered by long-term contracts with pharmaceutical and biotechnology companies, as well as partnerships with medical institutions seeking to advance their research and development efforts. The company's earnings are significantly influenced by trends in the healthcare and pharmaceutical industries, particularly the demand for new drug development and approval.

Fortrea Holdings Inc. Earnings Call Summary

Earnings Call Date:Aug 06, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 17, 2025
Earnings Call Sentiment Neutral
The earnings call for Fortrea's second quarter of 2025 highlighted strong revenue growth and positive cash flow, driven by the clinical pharmacology segment and operational efficiencies. However, these positives were offset by a significant net loss due to goodwill impairment and challenges in securing new business from biotech customers amid a leadership transition.
Q2-2025 Updates
Positive Updates
Revenue Growth
Fortrea reported revenue of $710.3 million for the second quarter, indicating a growth of 7.2% compared to the same period last year.
Positive Cash Flow
The company generated positive operating cash flow of $21.8 million and free cash flow of $14.3 million in the second quarter.
Clinical Pharmacology Segment Performance
The clinical pharmacology reporting unit showed strong performance, contributing significantly to the company's revenue growth.
Operational Efficiency
The company improved its days sales outstanding (DSO) by 5 days compared to the first quarter, demonstrating improved operational efficiency.
Introduction of Innovative Technology
Fortrea introduced Risk Radar, an AI-powered tool designed to enhance risk-based quality management in clinical trials.
Negative Updates
Net Loss and Goodwill Impairment
Fortrea reported a net loss of $374.9 million, primarily due to a noncash pretax goodwill impairment charge of $309.1 million.
Decline in New Business Wins
The company faced challenges in securing new business from new biotech customers, leading to a decline in win rates in this segment.
Leadership Transition Impact
Customer hesitancy was observed due to the CEO leadership transition, affecting new business acquisitions.
Company Guidance
During the Fortrea Second Quarter 2025 Earnings Conference Call, the company provided updated guidance and shared various performance metrics. Fortrea reported a second-quarter revenue of $710.3 million and an adjusted EBITDA of $54.9 million. The company's backlog as of June 30, 2025, was $7.5 billion, with a book-to-bill ratio of 0.79x for the quarter and 1.1x for the trailing 12 months. Despite some customer hesitancy, particularly among new biotech clients, Fortrea maintained consistent win rates with existing large pharma and biotech customers. The company also achieved positive cash flow, with a sound liquidity position and a balanced capital structure. Fortrea's revenue guidance for the year was increased, with the EBITDA range reaffirmed. Operational highlights included the successful delivery of a bioequivalence trial ahead of schedule and strong metrics in clinical projects. The company is also investing in innovation, introducing new modules in its Accelerate software platform, including an AI-powered Risk Radar. Fortrea continues to focus on cost optimization, having achieved a third of its $150 million gross savings target in the first half of 2025.

Fortrea Holdings Inc. Financial Statement Overview

Summary
Fortrea Holdings Inc. faces financial challenges with declining revenue and profitability, negative margins, and net losses. The balance sheet shows high leverage, posing potential risks, while cash flow management demonstrates some resilience with positive operating cash flow.
Income Statement
45
Neutral
The income statement shows declining revenue and profitability over recent periods, with a significant net loss in the TTM period. Revenue decreased from previous periods, and the company has negative EBIT and EBITDA margins, indicating operational challenges and inefficiencies.
Balance Sheet
50
Neutral
The balance sheet reflects a relatively high debt-to-equity ratio due to substantial debt levels, which could pose financial risks. Although stockholders' equity has decreased over time, the company maintains a reasonable equity ratio, indicating some stability in asset financing.
Cash Flow
40
Negative
Cash flow analysis indicates a decline in free cash flow compared to previous periods, yet the company maintains a positive operating cash flow. The free cash flow to net income ratio suggests some cash flow management strengths, although overall growth in free cash flow is limited.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021
Income Statement
Total Revenue2.73B2.70B2.84B3.10B3.06B
Gross Profit519.60M534.20M590.60M621.70M604.40M
EBITDA-858.80M-64.30M137.20M354.60M335.20M
Net Income-1.03B-328.50M-25.20M192.90M98.00M
Balance Sheet
Total Assets2.84B3.58B4.33B4.29B4.37B
Cash, Cash Equivalents and Short-Term Investments81.20M118.50M108.60M112.00M94.60M
Total Debt1.24B1.20B1.67B63.40M77.20M
Total Liabilities2.25B2.22B2.62B945.30M1.11B
Stockholders Equity589.20M1.36B1.71B3.34B3.26B
Cash Flow
Free Cash Flow-103.10M237.30M127.10M33.10M143.30M
Operating Cash Flow-87.70M262.80M167.40M87.50M169.80M
Investing Cash Flow4.00M251.60M-31.80M-54.00M-26.20M
Financing Cash Flow34.30M-497.80M-140.80M-8.70M-128.50M

Fortrea Holdings Inc. Technical Analysis

Technical Analysis Sentiment
Negative
Last Price8.40
Price Trends
50DMA
8.34
Positive
100DMA
6.67
Positive
200DMA
9.76
Negative
Market Momentum
MACD
0.11
Positive
RSI
40.17
Neutral
STOCH
3.75
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FTRE, the sentiment is Negative. The current price of 8.4 is below the 20-day moving average (MA) of 9.97, above the 50-day MA of 8.34, and below the 200-day MA of 9.76, indicating a neutral trend. The MACD of 0.11 indicates Positive momentum. The RSI at 40.17 is Neutral, neither overbought nor oversold. The STOCH value of 3.75 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FTRE.

Fortrea Holdings Inc. Risk Analysis

Fortrea Holdings Inc. disclosed 59 risk factors in its most recent earnings report. Fortrea Holdings Inc. reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Fortrea Holdings Inc. Peers Comparison

Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
60
Neutral
$641.68M-8.32-100.00%-25.75%
56
Neutral
$1.11B-6.71505.02%-19.56%35.55%
56
Neutral
$478.17M-7.28-4.00%-100.00%-266.37%
53
Neutral
$762.72M-100.49%-4.96%-284.00%
43
Neutral
$382.66M-3.15-9.14%
34
Underperform
$590.03M-4.5950.77%
51
Neutral
$7.86B-0.30-43.30%2.27%22.53%-2.21%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
FTRE
Fortrea Holdings Inc.
8.40
-11.24
-57.23%
NKTR
Nektar Therapeutics
58.92
39.42
202.15%
FULC
Fulcrum Therapeutics
8.67
5.07
140.83%
CMPX
Compass Therapeutics
3.82
1.92
101.05%
ERAS
Erasca
2.11
-0.48
-18.53%
AURA
Aura Biosciences Inc
6.17
-2.41
-28.09%

Fortrea Holdings Inc. Corporate Events

Business Operations and Strategy
Fortrea Expands Inducement Award Plan for New Hires
Positive
Aug 27, 2025

On August 21, 2025, Fortrea Holdings Inc. amended its 2025 Inducement Award Plan to increase the number of shares reserved for issuance by 2,200,000. This amendment allows for additional inducement award grants to new hires eligible under Nasdaq Listing Rule 5635(c)(4), expanding the company’s ability to attract new talent.

Executive/Board ChangesShareholder Meetings
Fortrea Holdings Approves Key Proposals at Annual Meeting
Neutral
Jun 12, 2025

On June 10, 2025, Fortrea Holdings Inc. held its Annual Meeting of Stockholders where several key proposals were approved. The amendment and restatement of the 2023 Omnibus Incentive Plan was a significant highlight, increasing the number of shares by 6,500,000 and introducing new vesting and dividend conditions. Additionally, the election of directors, ratification of Deloitte & Touche LLP as the independent auditor, and the advisory vote on executive compensation were also approved.

Business Operations and Strategy
Fortrea Holdings Inc. Adopts Stockholder Rights Plan
Neutral
Jun 12, 2025

On June 11, 2025, Fortrea Holdings Inc. announced the adoption of a limited-duration stockholder rights plan, effective immediately, to protect the interests of its stockholders amidst significant dislocation in its stock trading price. The plan, which expires on June 10, 2026, aims to ensure fair treatment in takeover scenarios and prevent hostile acquisitions without appropriate premiums. It allows stockholders to purchase additional shares at a discount if any entity acquires 10% or more of Fortrea’s common stock, encouraging potential acquirers to engage directly with the Board.

Executive/Board ChangesBusiness Operations and Strategy
Fortrea Holdings Appoints Anshul Thakral as New CEO
Neutral
Jun 11, 2025

On June 11, 2025, Fortrea Holdings Inc. announced the appointment of Anshul Thakral as the new President and CEO, effective August 4, 2025, succeeding interim CEO Peter M. Neupert, who will remain as chairman of the board. Thakral, with over 20 years of experience in the life sciences sector, aims to focus on executing Fortrea’s transformation plan and enhancing its focus on profitable growth, while overseeing efforts to create additional value for customers, employees, and shareholders.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Sep 23, 2025