Fortrea Holdings Inc. (FTRE) AI Stock Analysis

• Market Cap: $946.14M
• Dividend Yield: N/A
• Average Volume (3M): 1.37M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.60
• Revenue Growth: -4.96%
• EPS Growth: -284.00%
• Country: US
• Employees: 15,000
• Sector: Healthcare
• Sector Strength: 45
• Industry: Biotechnology
• EPS (TTM): 0.19
• Shares Outstanding: 90,800,000
• 10 Day Avg. Volume: 1,008,218
• 30 Day Avg. Volume: 1,374,205
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.70
• Enterprise Value/Revenue: 0.59
• Enterprise Value/Gross Profit: 3.09
• Enterprise Value/Ebitda: -1.87
• 1Y Price Target: $9.79
• Price Target Upside: -6.05% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 10

• Rating: 52 Neutral
• Price Target: $9.50 ▼(-8.83% Downside)

Fortrea Holdings Inc. has a challenging financial performance with significant profitability and cash flow issues, which is the most significant factor affecting the stock score. Technical analysis shows some positive momentum, but valuation remains unattractive due to negative earnings. The earnings call provided mixed signals, with strong revenue growth and innovation efforts being overshadowed by a large net loss and difficulties in acquiring new business.

Positive Factors

Revenue Growth

The 7.2% revenue growth reflects Fortrea's ability to expand its market presence and adapt to industry demands, supporting long-term business sustainability.

Operational Efficiency

Improved operational efficiency, as seen in reduced DSO, enhances cash flow management and supports better financial health over time.

Innovation in Technology

The introduction of AI-powered Risk Radar demonstrates Fortrea's commitment to innovation, potentially improving service quality and competitive positioning.

Negative Factors

Profitability Challenges

The significant net loss due to goodwill impairment highlights ongoing profitability challenges, impacting financial stability and investor confidence.

Decline in New Business Wins

Difficulty in acquiring new biotech clients suggests potential issues in market expansion and could hinder future revenue growth.

Leadership Transition Impact

The leadership transition has led to customer hesitancy, which may disrupt strategic initiatives and slow down business momentum.

Fortrea Holdings Inc. Business Overview & Revenue Model

Company Description

Fortrea Holdings Inc., a contract research organization, primarily engages in the provision of biopharmaceutical product and medical device development services worldwide. It operates through two segments: Clinical Services and Enabling Services. The Clinical Services segment provides across the clinical pharmacology and clinical development spectrum. The Enabling Services segment provides patient access and clinical trial technology solutions to customers that streamline complex randomization and optimize the trial drug supply process. The company offers delivery models that include full service, functional service provider, and hybrid service structures. It also offers phase I-IV clinical trial management, differentiated technology enabled trial solutions, and post approval services. The company serves pharmaceutical, biotechnology, and medical device organizations. Fortrea Holdings Inc. was incorporated in 2023 and is based in Durham, North Carolina.

How the Company Makes Money

Fortrea Holdings generates revenue through multiple streams, including the sale of pharmaceutical products, licensing agreements, and partnerships with other healthcare organizations. The company monetizes its proprietary therapeutics by distributing them through established healthcare channels. Additionally, Fortrea engages in strategic collaborations with research institutions and other biotech firms, allowing it to share development costs and access broader markets. The company may also receive milestone payments and royalties from partners as its products progress through clinical trials and achieve regulatory approvals, further enhancing its revenue potential.

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

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

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

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.73B	2.70B	2.84B	3.10B	3.06B
Gross Profit	519.60M	534.20M	590.60M	621.70M	604.40M
EBITDA	-858.80M	-64.30M	137.20M	354.60M	335.20M
Net Income	-1.03B	-328.50M	-25.20M	192.90M	98.00M
Balance Sheet
Total Assets	2.84B	3.58B	4.33B	4.29B	4.37B
Cash, Cash Equivalents and Short-Term Investments	81.20M	118.50M	108.60M	112.00M	94.60M
Total Debt	1.24B	1.20B	1.67B	63.40M	77.20M
Total Liabilities	2.25B	2.22B	2.62B	945.30M	1.11B
Stockholders Equity	589.20M	1.36B	1.71B	3.34B	3.26B
Cash Flow
Free Cash Flow	-103.10M	237.30M	127.10M	33.10M	143.30M
Operating Cash Flow	-87.70M	262.80M	167.40M	87.50M	169.80M
Investing Cash Flow	4.00M	251.60M	-31.80M	-54.00M	-26.20M
Financing Cash Flow	34.30M	-497.80M	-140.80M	-8.70M	-128.50M

Fortrea Holdings Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 10.42
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FTRE, the sentiment is Positive. The current price of 10.42 is above the 20-day moving average (MA) of 9.49, above the 50-day MA of 9.36, and above the 200-day MA of 9.04, indicating a bullish trend. The MACD of 0.16 indicates Negative momentum. The RSI at 58.56 is Neutral, neither overbought nor oversold. The STOCH value of 38.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FTRE.

Fortrea Holdings Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CMPX	60 Neutral	$694.87M	―	-51.84%	―	-100.00%	-25.75%
NKTR	56 Neutral	$1.20B	―	-440.80%	―	-19.56%	35.55%
FULC	56 Neutral	$498.72M	―	-30.00%	―	-100.00%	-266.37%
FTRE	52 Neutral	$946.14M	―	-100.49%	―	-4.96%	-284.00%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
AURA	43 Neutral	$352.22M	―	-55.39%	―	―	-9.14%
ERAS	34 Underperform	$697.83M	―	-31.16%	―	―	50.77%

Fortrea Holdings Inc. Corporate Events

Fortrea Expands Inducement Award Plan for New Hires

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.

Fortrea Holdings Approves Key Proposals at Annual Meeting

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.

Fortrea Holdings Inc. Adopts Stockholder Rights Plan

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.

Fortrea Holdings Appoints Anshul Thakral as New CEO

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.