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Fortrea Holdings Inc.
(NASDAQ:FTRE)
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Rating:60Neutral
Price Target:
$20.50
▲(8.70% Upside)
Action:Reiterated
Date:09/30/26
FTRE scores 60 primarily due to solid and improving cash flow supporting liquidity despite weak reported profitability and pressured margins, with leverage still a constraint. Technical indicators add support (price above key moving averages, positive MACD) and the latest earnings call was a net positive on raised guidance and bookings strength, while valuation remains challenged due to ongoing net losses and a negative P/E.
Positive Factors
Strong bookings and backlog
Growing awards, book-to-bill above 1.0x for four consecutive quarters, and a substantial backlog support future revenue visibility. These indicators suggest continued sponsor demand and provide a durable base for converting commercial momentum into revenue over the next several quarters.
Negative Factors
Persistent losses and margin pressure
Ongoing net losses and materially compressed gross margins weaken earnings quality and limit the company’s ability to convert revenue into durable profitability. A sustained recovery will require more than stable sales, because the lower margin base leaves less operating cushion against execution or mix pressures.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong bookings and backlog
Growing awards, book-to-bill above 1.0x for four consecutive quarters, and a substantial backlog support future revenue visibility. These indicators suggest continued sponsor demand and provide a durable base for converting commercial momentum into revenue over the next several quarters.
Read all positive factors
Fortrea Holdings Inc. (FTRE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.98B
Dividend YieldN/A
Average Volume (3M)1.50M
Price to Earnings (P/E)―
Beta (1Y)1.87
Revenue Growth-2.09%
EPS Growth91.98%
CountryUS
Employees14,000
SectorHealthcare
Sector Strength45
IndustryBiotechnology
Share Statistics
EPS (TTM)-0.93
Shares Outstanding95,100,000
10 Day Avg. Volume1,705,280
30 Day Avg. Volume1,504,719
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 Cap1.31
Enterprise Value/Revenue0.97
Enterprise Value/Gross Profit5.67
Enterprise Value/Ebitda32.00
Forecast
1Y Price Target
$21.39Price Target Upside13.41% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
EPS Forecast (FY)0.84
Revenue Forecast (FY)$2.66B
Fortrea Holdings Inc. Business Overview & Revenue Model
Company Description
Fortrea Holdings Inc. functions as a global contract research organization (CRO), concentrating on providing development services for biopharmaceutical products and medical devices. The company's operations are divided into two main segments: Clin...
How the Company Makes Money
Fortrea primarily makes money by providing outsourced clinical research and development services to life sciences sponsors under contractual arrangements. Revenue is generally generated from service fees tied to the planning and execution of clini...
Fortrea Holdings Inc. Earnings Call Summary
Earnings Call Date:Jul 29, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 29, 2026
Earnings Call Sentiment Positive
The call highlighted substantial commercial momentum (bookings up, net new business +19% H1), improved profitability metrics (adjusted EBITDA growth, cost savings, SG&A reduction), stronger cash generation and an upgraded full-year guidance, alongside early operational wins from FIT/AI and CPS strength. Key risks discussed include a modest YoY revenue decline driven by pass-through/FSP dynamics, elevated customer concentration, a CFO transition related to a restrictive covenant matter, and the early-stage nature of AI benefits. On balance, the positive operational, commercial and financial traction and the guidance raise outweigh the listed challenges.Positive Updates
Revenue and Adjusted EBITDA
Q2 revenue of $678.2M and adjusted EBITDA of $58.7M. Despite a 4.5% year-over-year revenue decline (driven by lower pass-throughs and FSP headwinds), adjusted EBITDA increased to $58.7M (up ~6.9% YoY). Management also raised full-year 2026 guidance to revenue of $2.62B–$2.69B and adjusted EBITDA of $205M–$220M.
Negative Updates
Revenue Decline and Pass-Through / FSP Headwinds
Revenue decreased 4.5% YoY in Q2 primarily due to lower pass-through costs and continued FSP (functional service provider) headwinds. Management noted pass-through volatility and FSP drag remain factors on near-term margin dynamics.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue and Adjusted EBITDA
Q2 revenue of $678.2M and adjusted EBITDA of $58.7M. Despite a 4.5% year-over-year revenue decline (driven by lower pass-throughs and FSP headwinds), adjusted EBITDA increased to $58.7M (up ~6.9% YoY). Management also raised full-year 2026 guidance to revenue of $2.62B–$2.69B and adjusted EBITDA of $205M–$220M.
Read all positive updates
Company Guidance
Fortrea raised full‑year 2026 guidance to revenue of $2.62–$2.69 billion and adjusted EBITDA of $205–$220 million and reiterated expectations for positive free cash flow for the remainder of 2026 and the full year; management cited Q2 results that supported the upgrade — revenue of $678.2 million, adjusted EBITDA $58.7 million, adjusted net income $22.7 million (adjusted EPS $0.24 basic/$0.23 diluted), net loss $13.2 million, operating cash flow $28.9 million and free cash flow $19.9 million. Commercial momentum included $720.4 million of Q2 net new business, a book‑to‑bill of 1.06x (trailing 12‑month 1.12x) and first‑half net new business up 19% YoY; backlog was $7.8 billion with 8.6% backlog burn. Management also highlighted available liquidity in excess of $0.5 billion, net AR and unbilled services of $654.4 million (vs. $739.2M a year ago), YTD gross cost savings of $34 million (net $19M), Q2 interest expense of $19.3 million (down $4M) and ~35% of original debt paid down since the spin.Fortrea Holdings Inc. Financial Statement Overview
Summary
Income Statement
28
Negative
Balance Sheet
45
Neutral
Cash Flow
67
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.68B | 2.72B | 2.70B | 2.84B | 2.84B | 3.06B |
| Gross Profit | 457.90M | 425.80M | 534.20M | 590.60M | 724.40M | 604.40M |
| EBITDA | 81.20M | -813.60M | -64.30M | 137.20M | 280.80M | 302.90M |
| Net Income | -85.20M | -986.20M | -328.50M | -25.20M | 186.20M | 98.00M |
Balance Sheet | ||||||
| Total Assets | 2.71B | 2.72B | 3.58B | 4.33B | 4.29B | 4.37B |
| Cash, Cash Equivalents and Short-Term Investments | 168.60M | 174.60M | 118.50M | 108.60M | 112.00M | 94.60M |
| Total Debt | 1.12B | 1.12B | 1.20B | 1.67B | 63.40M | 77.20M |
| Total Liabilities | 2.19B | 2.15B | 2.22B | 2.62B | 945.30M | 1.11B |
| Stockholders Equity | 524.20M | 563.50M | 1.36B | 1.71B | 3.34B | 3.26B |
Cash Flow | ||||||
| Free Cash Flow | 150.60M | 88.30M | 237.30M | 128.10M | 28.30M | 143.30M |
| Operating Cash Flow | 182.40M | 113.50M | 262.80M | 168.40M | 82.70M | 169.80M |
| Investing Cash Flow | -9.20M | 14.40M | 251.60M | -31.80M | -54.00M | -26.20M |
| Financing Cash Flow | -125.70M | -76.30M | -497.80M | -140.80M | -6.30M | -128.50M |
Fortrea Holdings Inc. Technical Analysis
Positive
18.86
Price Trends
18.91
Positive
17.87
Positive
15.28
Positive
Market Momentum
0.55
Negative
60.12
Neutral
34.53
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 18.86 is below the 20-day moving average (MA) of 20.00, below the 50-day MA of 18.91, and above the 200-day MA of 15.28, indicating a bullish trend. The MACD of 0.55 indicates Negative momentum. The RSI at 60.12 is Neutral, neither overbought nor oversold. The STOCH value of 34.53 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 | $1.93B | -13.89 | -35.42% | ― | -3.28% | 61.09% | |
61 Neutral | $4.07B | -23.22 | -17.49% | ― | 101.28% | 2.49% | |
60 Neutral | $1.98B | -22.19 | -15.53% | ― | -2.09% | 91.98% | |
60 Neutral | $2.56B | -22.04 | -26.01% | ― | ― | -4.40% | |
56 Neutral | $2.34B | -4.10 | -50.41% | ― | -15.08% | 41.98% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
49 Neutral | $1.84B | -13.58 | -108.80% | ― | ― | ― |
* Healthcare Sector Average
FTRE
Fortrea Holdings Inc.
20.84
11.02
112.22%
MRVI
Maravai Lifesciences Holdings
7.44
4.14
125.45%
ABCL
AbCellera Biologics
12.55
6.88
121.25%
RXRX
Recursion Pharmaceuticals
4.36
-1.17
-21.16%
MBX
MBX Biosciences, Inc.
53.24
38.74
267.17%
GENB
Generate Biomedicines, Inc.
14.34
1.69
13.36%
Fortrea Holdings Inc. Corporate Events
Executive/Board Changes
Fortrea Names Carrie Russell Chief Accounting Officer
Positive
Sep 30, 2026
Effective October 5, 2026, Fortrea Holdings Inc. appointed Carrie Russell as Chief Accounting Officer, formalizing her transition from interim Chief Accounting Officer and principal accounting officer while she continues to serve as Vice President...
Executive/Board ChangesLegal Proceedings
Fortrea Reinstates Jason Knoblauch as Chief Financial Officer
Positive
Sep 10, 2026
On September 9, 2026, Fortrea Holdings Inc. reinstated Jason Knoblauch as Chief Financial Officer and principal financial officer, maintaining his previously disclosed compensation package. His return restores the company’s dedicated financi...
Business Operations and StrategyExecutive/Board ChangesFinancial DisclosuresLegal Proceedings
Fortrea Names Interim CFO Amid Ongoing Legal Dispute
Positive
Jul 29, 2026
On July 27, 2026, Fortrea’s board appointed current director David Smith as interim chief financial officer, following a July 25, 2026 Delaware Court order temporarily restraining newly hired CFO Jason Knoblauch from serving due to litigatio...
Executive/Board Changes
Fortrea Announces Key Accounting Leadership Transition Plans
Neutral
Jul 15, 2026
On July 8, 2026, Fortrea announced that Chief Accounting Officer and principal accounting officer Robert A. Parks will resign effective August 7, 2026 to pursue an opportunity outside the contract research organization industry, with the company s...
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.