Fortrea Holdings Inc. (FTRE)
🔔 Watch stock
On June 30, 2023, the lab-diagnostics group Labcorp sent its clinical-trials business to the stock exchange as Fortrea — with 30 years of Covance history, 14,300 employees and a dowry of $1.64 billion in debt plus goodwill from old acquisitions. Two and a half years later the stock sits in our going-concern warning scanner. We read the annual report (10-K) for 2025 and the quarterly report (10-Q) as of March 31, 2026: $797.9 million of goodwill written off, a $986.2 million annual loss, loosened credit covenants, $300 million of receivables sold, one customer at 18.1 percent of revenue — and at the same time an order book above $7.8 billion and a nearly break-even first quarter of 2026. Not investment advice — just the question of what a fine pedigree is worth when the debts ride along in the moving boxes.
Basics
Performance
Valuation
Profitability
Balance Sheet & Safety
Growth
Quality & Screener
AI Rating
–Not yet rated — we only show a category once an SEC-backed file with at least two cited passages is available. How the Rating Is Built
Highlighted are things our editorial team noticed: green = stands out as strong, red = deserves a closer look. No single metric is a verdict on its own — always read it in context.
Quarterly Figures
| Quarter | EPS (Earnings Per Share) | EPS YoY (%) | Sales ($M) | Sales YoY (%) | Net Margin (%) | OCF ($M) | FCF ($M) |
|---|---|---|---|---|---|---|---|
| 2024: Q4 | -0.68 | – | 697 | -10.10 | -8.80 | 17 | 20 |
| 2025: Q1 | -6.30 | – | 651 | -1.60 | -86.40 | -124 | -127 |
| 2025: Q2 | -4.14 | – | 710 | 7.20 | -52.80 | 22 | 14 |
| 2025: Q3 | -0.17 | – | 701 | 3.90 | -2.30 | 87 | 80 |
| 2025: Q4 | -0.36 | – | 661 | -5.20 | -4.90 | 129 | 122 |
| 2026: Q1 | -0.26 | – | 637 | -2.30 | -3.70 | -17 | -25 |
- EPS (Earnings Per Share):
- Quarterly profit divided by the total share count — how much of the profit works out to a single share.
- YoY (Year over Year):
- Change versus the same quarter a year ago — this is how you compare without seasonal distortion (e.g. the holiday shopping season).
- Sales:
- All revenue for the quarter, before any costs are deducted — the top line of the income statement.
- Net Margin:
- What percentage of sales is left over as profit in the end. Negative means the company is posting a loss.
- OCF (Operating Cash Flow):
- The cash that actually flows into the till from the core business during the quarter — harder to dress up than book profit.
- FCF (Free Cash Flow):
- Operating cash flow minus capital expenditures — the money that's genuinely free to use, say for paying down debt, buybacks, or dividends.
Assessment: Opportunities & Risks
An established, global CRO business with more than 30 years of history, about 14,300 employees and an order backlog of $7.8 billion (March 31, 2026) — revenue stayed remarkably stable from 2023 through 2025 at $2.7 to $2.8 billion. The report's own caveat: the backlog is not a reliable revenue indicator, and most contracts can be terminated on 30 to 90 days' notice.
The cost-cutting works: administrative expenses minus 18.6 percent (2025) and minus 17.5 percent (Q1 2026), an operating loss of only $3.4 million in the first quarter of 2026 after $520.1 million in the prior-year quarter; a new CEO since August 2025. The threshold to operating profit is reachable — it is not yet proven.
A $797.9 million goodwill impairment in 2025 (trigger: the company's own share-price slide to $4.94), a net loss of $986.2 million, equity halved from $1,362.4 to $563.5 million — and the remaining goodwill ($960.0 million) exceeds total equity. The report itself warns of possible further impairments.
About $1,066.3 million in principal debt as the spin-off dowry, $91.4 million of interest in 2025 against an operating loss even before the impairment; credit covenants loosened on February 28, 2025 "for additional flexibility"; maturities of $387.5 million (2028) and $649.0 million (2030) against $147.5 million of cash — in addition, $300 million of receivables are sold (with a rating trigger since February 2026).
A single customer accounted for 18.1 percent of 2025 revenue, the top 20 for 69 percent with a rising trend; revenue fell 2.3 percent in the first quarter of 2026. On top of that, a shareholder class action has been running since June 2025 (motion to dismiss January 2026), and the board has installed a poison pill with a 10 percent threshold.
Fortrea is not an empty warning-scanner ghost but a genuine global contract research company with stable revenue, a bulging order book and measurable cost progress. But the filings show what the ex-parent Labcorp packed for its daughter: a debt dowry of originally $1.64 billion whose covenants already had to be loosened, and an acquisition goodwill of which almost $800 million was written off in 2025 — triggered by the company's own share-price crash. Add one customer at 18.1 percent of revenue, $300 million of sold receivables and an ongoing class action. Not investment advice.
- Scanner membership ("Going Concern (Distress Proxy)", plus the P/S, price-to-cash-flow and price-to-free-cash-flow rankings) verified live on the platform on July 14, 2026; metrics data as of July 8, 2026.
- The 2025 net loss (−$986.2 million) contains $797.9 million of non-cash goodwill impairment; without it, an operating loss of about $75 million would have remained. The 2024 loss (−$328.5 million) contains −$57.0 million from the discontinued Enabling Services business.
- Price and valuation figures dated July 8, 2026 (about $17.70, about 93 million shares); analyses are evergreen, daily prices are not a buy argument.
About the Company
Fortrea Holdings Inc., ein Auftragsforschungsinstitut, bietet weltweit Lösungen für die Entwicklung von biopharmazeutischen Produkten und Medizinprodukten für Pharma-, Biotechnologie- und Medizinproduktekunden an.
| IPO Year | 2023 |
|---|---|
| Next Earnings | 5. Aug 2026 |
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Data as of: July 2, 2026 · Source: fundamental data & SEC filings (annual and quarterly reports, 10-K/10-Q)
Note: pure fact-based analysis, not investment advice and not a solicitation to buy or sell. All figures without guarantee.