Fortrea Holdings Inc. (FTRE)
NASDAQ:FTRE
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Fortrea Holdings Inc.
(NASDAQ:FTRE)
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Rating:62Neutral
Price Target:
$14.00
▲(34.87% Upside)
Action:Reiterated
Date:05/09/26
The score is driven by mixed financial performance (solid cash flow and low current leverage but sharp TTM revenue decline and ongoing losses), complemented by a strong technical uptrend that is currently overextended. Earnings-call commentary supports the rating via reiterated guidance, improving book-to-bill/backlog, and cost-savings traction, while valuation is penalized by negative earnings and no dividend support.
Positive Factors
Backlog & Book-to-Bill
A $7.8B backlog and a Q1 book-to-bill of 1.15x provide multi-quarter revenue visibility and evidence of improving commercial traction. Durable backlog supports utilization planning, steadier revenue conversion and underpins capacity allocation and margin recovery over the next 2–6 months.
Negative Factors
Revenue & margin deterioration
A severe TTM revenue drop and compressed gross margins materially weaken core earnings power. Lower pricing/volume and reduced fixed‑cost absorption make margin recovery harder and increase dependency on cost cuts and non‑recurring cash benefits, constraining durable profitability and equity value creation.
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Positive Factors
Negative Factors
Backlog & Book-to-Bill
A $7.8B backlog and a Q1 book-to-bill of 1.15x provide multi-quarter revenue visibility and evidence of improving commercial traction. Durable backlog supports utilization planning, steadier revenue conversion and underpins capacity allocation and margin recovery over the next 2–6 months.
Read all positive factors
Fortrea Holdings Inc. (FTRE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.42B
Dividend YieldN/A
Average Volume (3M)1.80M
Price to Earnings (P/E)―
Beta (1Y)2.02
Revenue Growth0.86%
EPS Growth42.65%
CountryUS
Employees15,000
SectorHealthcare
Sector Strength45
IndustryBiotechnology
Share Statistics
EPS (TTM)-4.93
Shares Outstanding94,600,000
10 Day Avg. Volume2,205,510
30 Day Avg. Volume1,801,545
Financial Highlights & Ratios
PEG Ratio>-0.01
Price to Book (P/B)2.79
Price to Sales (P/S)0.58
P/FCF Ratio17.82
Enterprise Value/Market Cap0.95
Enterprise Value/Revenue0.50
Enterprise Value/Gross Profit3.11
Enterprise Value/Ebitda-4.74
Forecast
1Y Price Target
$15.08Price Target Upside45.31% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
EPS Forecast (FY)0.8
Revenue Forecast (FY)$2.61B
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. ...
How the Company Makes Money
Fortrea makes money primarily by delivering outsourced clinical development services to life sciences customers under contracted arrangements. Revenue is generated through service contracts tied to specific clinical development programs (e.g., run...
Fortrea Holdings Inc. Earnings Call Summary
Earnings Call Date:May 05, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 17, 2026
Earnings Call Sentiment Positive
The call balanced clear operational and commercial progress (book-to-bill >1.1x, adjusted EBITDA growth, large backlog, strong cost savings, FIT launch, China momentum and improved cash flow metrics) against near-term revenue pressure driven by lower pass-throughs and FSP pricing concessions, customer concentration and continued negative (though improved) Q1 cash flow. Management reiterated full-year guidance and a multi-year plan to reach mid-teens adjusted EBITDA margins. Overall, the positive operational, financial and commercial momentum and materially improved profitability and cash metrics outweigh the listed headwinds.Positive Updates
Improved Commercial Traction - Book-to-Bill Above 1
Q1 book-to-bill of 1.15x and trailing 12-month book-to-bill of 1.05x, marking the third consecutive quarter with book-to-bill >= 1.1x and indicating improving sales execution and pipeline momentum (notably new-to-Fortrea biotech wins).
Negative Updates
Year-over-Year Revenue Decline
Q1 revenue declined 2.3% YoY (to $636.5M), including a 3.2% constant currency decline partially offset by a 0.9% currency benefit; decline driven primarily by lower pass-through costs and continued FSP headwinds.
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Q1-2026 Updates
Positive
Negative
Improved Commercial Traction - Book-to-Bill Above 1
Q1 book-to-bill of 1.15x and trailing 12-month book-to-bill of 1.05x, marking the third consecutive quarter with book-to-bill >= 1.1x and indicating improving sales execution and pipeline momentum (notably new-to-Fortrea biotech wins).
Read all positive updates
Company Guidance
Fortrea reiterated full‑year 2026 guidance of $2.55–2.65 billion in revenue and $190–220 million in adjusted EBITDA while targeting mid‑teens adjusted EBITDA margins over the next 3–5 years; management expects a modest sequential revenue increase in Q2 and a slight step‑up in adjusted EBITDA (partly offset by higher variable compensation). Q1 underpinned the outlook with revenue of $636.5M, adjusted EBITDA $47M, book‑to‑bill 1.15x (TTM 1.05x), backlog $7.8B and backlog burn 8.2%; Q1 results also included net loss $23.6M, adjusted net income $15.2M (adj. EPS $0.16), operating cash flow −$17M and free cash flow −$25M, DSO 20 days and net A/R & unbilled $619.6M. Management reported nearly $16M of gross and >$9M of net quarterly cost savings toward full‑year targets of $70–80M gross / $40–50M net, reiterated plans to be operating cash‑flow positive in the remainder of 2026, noted available liquidity in excess of $0.5B, and highlighted ~35% of original debt repaid since the spin.Fortrea Holdings Inc. Financial Statement Overview
Summary
Income Statement
22
Negative
Balance Sheet
64
Positive
Cash Flow
71
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.71B | 2.72B | 2.70B | 2.84B | 2.84B | 3.06B |
| Gross Profit | 432.60M | 425.80M | 534.20M | 590.60M | 724.40M | 604.40M |
| EBITDA | -284.40M | -813.60M | -64.30M | 137.20M | 280.80M | 302.90M |
| Net Income | -446.90M | -986.20M | -328.50M | -25.20M | 186.20M | 98.00M |
Balance Sheet | ||||||
| Total Assets | 2.68B | 2.72B | 3.58B | 4.33B | 4.29B | 4.37B |
| Cash, Cash Equivalents and Short-Term Investments | 147.50M | 174.60M | 118.50M | 108.60M | 112.00M | 94.60M |
| Total Debt | 75.40M | 68.00M | 1.20B | 1.67B | 63.40M | 77.20M |
| Total Liabilities | 2.16B | 2.15B | 2.22B | 2.62B | 945.30M | 1.11B |
| Stockholders Equity | 525.90M | 563.50M | 1.36B | 1.71B | 3.34B | 3.26B |
Cash Flow | ||||||
| Free Cash Flow | 190.40M | 88.30M | 237.30M | 128.10M | 28.30M | 143.30M |
| Operating Cash Flow | 220.70M | 113.50M | 262.80M | 168.40M | 82.70M | 169.80M |
| Investing Cash Flow | -9.70M | 14.40M | 251.60M | -31.80M | -54.00M | -26.20M |
| Financing Cash Flow | -164.70M | -76.30M | -497.80M | -140.80M | -6.30M | -128.50M |
Fortrea Holdings Inc. Technical Analysis
Positive
10.38
Price Trends
11.52
Positive
12.42
Positive
11.92
Positive
Market Momentum
0.74
Positive
70.55
Negative
70.34
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 10.38 is below the 20-day moving average (MA) of 14.10, below the 50-day MA of 11.52, and below the 200-day MA of 11.92, indicating a bullish trend. The MACD of 0.74 indicates Positive momentum. The RSI at 70.55 is Negative, neither overbought nor oversold. The STOCH value of 70.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FTRE.
Fortrea Holdings Inc. Risk Analysis
Fortrea Holdings Inc. disclosed 57 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
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
62 Neutral | $1.42B | -3.14 | -79.12% | ― | 0.86% | 42.65% | |
57 Neutral | $2.20B | -10.15 | -87.00% | ― | -36.24% | 11.52% | |
55 Neutral | $454.44M | -6.93 | -27.80% | ― | -100.00% | -2365.81% | |
52 Neutral | $775.40M | -4.48 | -78.12% | ― | ― | 7.21% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
45 Neutral | $3.79B | -14.11 | -77.01% | ― | ― | -49.51% | |
45 Neutral | $434.01M | -6.51 | -39.75% | ― | -100.00% | -2.72% |
* Healthcare Sector Average
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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.