Fortrea Holdings Inc. (FTRE) AI Stock Analysis

• Market Cap: $1.47B
• Dividend Yield: N/A
• Average Volume (3M): 1.30M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.60
• Revenue Growth: -0.54%
• EPS Growth: -259.57%
• Country: US
• Employees: 15,000
• Sector: Healthcare
• Sector Strength: 45
• Industry: Biotechnology
• EPS (TTM): 0.12
• Shares Outstanding: 92,400,000
• 10 Day Avg. Volume: 1,512,961
• 30 Day Avg. Volume: 1,301,125
• PEG Ratio: >-0.01
• Price to Book (P/B): 1.23
• Price to Sales (P/S): 0.62
• P/FCF Ratio: 7.03
• Enterprise Value/Market Cap: 1.24
• Enterprise Value/Revenue: 0.66
• Enterprise Value/Gross Profit: 3.84
• Enterprise Value/Ebitda: -2.14
• 1Y Price Target: $15.86
• Price Target Upside: -3.88% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9
• EPS Forecast (FY): 0.77
• Revenue Forecast (FY): $2.72B

• Rating: 56 Neutral
• Price Target: $16.50 ▲(0.00% Upside)

Fortrea Holdings Inc. faces significant financial challenges, which heavily impact its overall score. However, strong technical indicators and positive corporate events provide some optimism. The earnings call also highlighted some strategic improvements, but valuation concerns remain due to negative earnings.

Positive Factors

Backlog and book-to-bill strength

A >$7.6B backlog and a book-to-bill above 1 indicate durable demand visibility and multi-quarter revenue conversion for a CRO. This backlog supports steady utilization, planning, and revenue recognition over the medium term, reducing near-term revenue volatility risk.

Operational productivity improvements

Deploying AI-driven tooling plus a 33% reduction in time to site selection and faster enrollment are structural efficiency gains. They lower unit costs, shorten trial timelines, and improve capacity utilization, supporting sustainable margin expansion and competitive service differentiation.

Stronger liquidity and debt management

Having sizable available liquidity and executing a targeted tender for secured notes materially reduces refinancing risk and interest burden. This enhances financial flexibility to fund operations, invest in tools, or withstand biotech funding cycles over the medium term.

Negative Factors

Weak profitability metrics

Persistently negative net margins and shrinking gross margins signal structural margin pressure from cost structure or pricing. Unless reversed, this undermines sustainable earnings generation, limits reinvestment capacity, and raises sensitivity to contract mix and pricing negotiation outcomes.

Cash conversion inefficiency

Negative FCF growth and very poor conversion of earnings into cash reflect working capital strain and high pass-through or capex needs. Over months, weak cash conversion constrains reinvestment, debt servicing, and ability to fund strategic initiatives without external financing.

FSP pricing pressure and EBITDA decline

Declining adjusted EBITDA and intense pricing competition in Functional Service Provider engagements signal margin compression in a core revenue stream. Walking away from low-margin deals preserves discipline but may slow revenue growth and limit scale advantages in key service lines.

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 substantial financial challenges, with negative profitability and cash flow inefficiencies. Despite some improvement in leverage, the negative return on equity and declining gross profit margins indicate ongoing operational difficulties.

Income Statement

Fortrea Holdings Inc. has experienced significant revenue volatility, with a recent TTM revenue growth of 96.6%, but this follows a period of declining revenues. The company is struggling with profitability, as evidenced by negative net profit margins and EBIT margins in the TTM period. The gross profit margin has also decreased over time, indicating challenges in maintaining cost efficiency.

Balance Sheet

The company's balance sheet shows a moderate debt-to-equity ratio in the TTM period, which has improved from previous years. However, the return on equity is negative, reflecting ongoing losses. The equity ratio remains stable, suggesting a reasonable level of financial stability despite profitability challenges.

Cash Flow

Fortrea Holdings Inc. faces significant cash flow challenges, with a negative free cash flow growth rate in the TTM period. The operating cash flow to net income ratio is extremely low, indicating difficulties in converting income into cash. The free cash flow to net income ratio is also negative, highlighting cash flow inefficiencies.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.76B	2.70B	2.84B	2.84B	3.06B
Gross Profit	474.40M	534.20M	590.60M	724.40M	604.40M
EBITDA	-852.80M	-64.30M	137.20M	280.80M	302.90M
Net Income	-1.01B	-328.50M	-25.20M	186.20M	98.00M
Balance Sheet
Total Assets	2.74B	3.58B	4.33B	4.29B	4.37B
Cash, Cash Equivalents and Short-Term Investments	131.30M	118.50M	108.60M	112.00M	94.60M
Total Debt	1.19B	1.20B	1.67B	63.40M	77.20M
Total Liabilities	2.16B	2.22B	2.62B	945.30M	1.11B
Stockholders Equity	580.80M	1.36B	1.71B	3.34B	3.26B
Cash Flow
Free Cash Flow	-13.00M	237.30M	128.10M	28.30M	143.30M
Operating Cash Flow	1.50M	262.80M	168.40M	82.70M	169.80M
Investing Cash Flow	25.40M	251.60M	-31.80M	-54.00M	-26.20M
Financing Cash Flow	-1.70M	-497.80M	-140.80M	-6.30M	-128.50M

Fortrea Holdings Inc. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 16.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FTRE, the sentiment is Neutral. The current price of 16.5 is below the 20-day moving average (MA) of 17.26, above the 50-day MA of 14.56, and above the 200-day MA of 8.98, indicating a neutral trend. The MACD of 0.57 indicates Positive momentum. The RSI at 51.35 is Neutral, neither overbought nor oversold. The STOCH value of 21.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for FTRE.

Fortrea Holdings Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CMPX	58 Neutral	$1.03B	-12.46	-37.82%	―	-100.00%	-28.79%
FTRE	56 Neutral	$1.47B	-1.46	-98.13%	―	-0.54%	-259.57%
FULC	53 Neutral	$684.77M	-8.60	-31.21%	―	-100.00%	-305.92%
ERAS	52 Neutral	$2.71B	-21.34	-32.00%	―	―	45.66%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
NKTR	47 Neutral	$719.28M	-4.75	-180.24%	―	-32.79%	36.87%
AURA	42 Neutral	$324.50M	-2.60	-64.26%	―	―	-11.41%

Fortrea Holdings Inc. Corporate Events

Fortrea Holdings Completes Oversubscribed Debt Tender Offer

Fortrea Holdings, Inc. announced the expiration of its debt tender offer on November 18, 2025, to purchase up to $75,744,000 of its outstanding 7.500% Senior Secured Notes due 2030. The offer was oversubscribed, and the company accepted $75,743,000 in aggregate principal amount of the Notes based on a Final Proration Factor, indicating strong investor interest.

The most recent analyst rating on (FTRE) stock is a Hold with a $9.50 price target. To see the full list of analyst forecasts on Fortrea Holdings Inc. stock, see the FTRE Stock Forecast page.