Pomerantz Law Firm Announces the Filing of a Class Action Against Fortrea Holdings, Inc. and Certain Officers – FTRE

Core Viewpoint - A class action lawsuit has been filed against Fortrea Holdings, Inc. and certain officers for alleged violations of federal securities laws during the Class Period from July 3, 2023, to February 28, 2025, seeking damages for misleading statements regarding the company's business and financial prospects [1][6]. Company Overview - Fortrea is a global contract research organization (CRO) that provides biopharmaceutical product and medical device development solutions to various customers [4]. - The company was spun off from Labcorp Holdings Inc. in June 2023, becoming a standalone publicly traded entity [4]. - Fortrea claims to have the scale and expertise to deliver tailored solutions to its customers, with a focus on operational agility and financial flexibility [5]. Financial Performance and Projections - In March 2024, Fortrea targeted an adjusted EBITDA margin of approximately 13% for 2025, which was later revised to a range of 11% to 12% in August 2024, still representing a projected increase of 30% to 40% in adjusted EBITDA dollars [6]. - The lawsuit alleges that Fortrea overestimated revenue contributions from Pre-Spin Projects and overstated cost savings from exiting transition services agreements (TSAs), leading to inflated EBITDA targets [6]. Market Reactions and Analyst Reports - On September 25, 2024, Jefferies downgraded Fortrea from buy to hold, citing weaknesses in the business model amid pressure on biotechnology funding, resulting in a stock price drop of 12.29% [8]. - Following the cancellation of two scheduled conferences, Baird Equity Research downgraded Fortrea to neutral on December 6, 2024, leading to an 8.06% decline in stock price [9]. - On March 3, 2025, Fortrea announced that its revenue and adjusted EBITDA trajectories for 2025 were not aligned with prior expectations, causing a significant stock price drop of 25.05% [10]. Credit Rating and Future Outlook - After the Class Period, Fitch Ratings downgraded Fortrea, projecting a 2025 EBITDA margin of 7.0% to 8.0%, a significant decline from earlier targets of 13% and 11%-12% [11].