Fortrea (NASDAQ:FTRE) Posts Earnings Results, Beats Estimates By $0.05 EPS

Fortrea (NASDAQ:FTRE) issued its earnings results on Wednesday. The company reported $0.23 EPS for the quarter, beating analysts’ consensus estimates of $0.18 by $0.05, FiscalAI reports. Fortrea had a negative net margin of 16.50% and a positive return on equity of 9.51%. The business had revenue of $678.20 million for the quarter, compared to the consensus estimate of $647.53 million.

Here are the key takeaways from Fortrea’s conference call:

• Full-year guidance was raised, with 2026 revenue now expected at $2.62 billion–$2.69 billion and adjusted EBITDA at $205 million–$220 million, reflecting solid first-half execution and improving backlog mix.
• Commercial momentum continued: second-quarter net new business was $720.4 million, book-to-bill was 1.06x, and trailing 12-month book-to-bill reached 1.12x. First-half awards rose 19% year over year, driven particularly by biotech customers.
• Second-quarter adjusted EBITDA increased to $58.7 million from $54.9 million despite revenue declining 4.5% to $678.2 million, supported by cost savings and operational efficiencies. The company delivered $19 million of net cost savings year to date.
• Cash generation and the balance sheet improved, with quarterly free cash flow of $19.9 million, no revolver borrowings during the first half, more than $500 million of available liquidity, and approximately 35% of original debt repaid since the spin-off.
• New CFO Jason Knoblauch is unable to serve in the role while an employment restrictive-covenant proceeding involving his former employer is ongoing; board member David Smith is serving as interim CFO, creating an executive leadership transition and related uncertainty.

Fortrea Stock Up 0.1%

NASDAQ FTRE traded up $0.02 during trading hours on Wednesday, reaching $20.72. 1,571,380 shares of the company traded hands, compared to its average volume of 1,504,420. The company has a current ratio of 0.95, a quick ratio of 0.95 and a debt-to-equity ratio of 1.98. The stock has a market capitalization of $1.96 billion, a PE ratio of -4.21, a PEG ratio of 0.58 and a beta of 2.03. Fortrea has a 12 month low of $5.26 and a 12 month high of $21.39. The company has a 50 day moving average of $16.68 and a two-hundred day moving average of $13.77.

Institutional Inflows and Outflows

Hedge funds have recently made changes to their positions in the company. AQR Capital Management LLC raised its position in shares of Fortrea by 494.8% during the 2nd quarter. AQR Capital Management LLC now owns 6,515,124 shares of the company’s stock valued at $31,729,000 after acquiring an additional 5,419,842 shares in the last quarter. Park West Asset Management LLC bought a new position in shares of Fortrea in the 3rd quarter worth about $18,579,000. Iron Triangle Partners LP bought a new position in shares of Fortrea in the 4th quarter worth about $34,264,000. MetLife Investment Management LLC boosted its holdings in shares of Fortrea by 2,328.5% in the 4th quarter. MetLife Investment Management LLC now owns 1,368,656 shares of the company’s stock valued at $23,609,000 after buying an additional 1,312,297 shares during the period. Finally, Bank of America Corp DE lifted its holdings in Fortrea by 78.1% in the third quarter. Bank of America Corp DE now owns 1,525,023 shares of the company’s stock worth $12,841,000 after acquiring an additional 668,691 shares during the last quarter.

Wall Street Analyst Weigh In

A number of research firms have recently issued reports on FTRE. Barclays increased their target price on Fortrea from $16.00 to $18.00 and gave the company an “equal weight” rating in a research note on Wednesday, June 24th. Deutsche Bank Aktiengesellschaft reissued a “hold” rating and set a $14.00 price target on shares of Fortrea in a research report on Thursday, May 7th. Zacks Research raised shares of Fortrea from a “hold” rating to a “strong-buy” rating in a research report on Monday, July 6th. Citigroup lifted their price objective on shares of Fortrea from $16.00 to $20.00 and gave the company a “buy” rating in a research note on Wednesday, May 6th. Finally, Mizuho boosted their target price on shares of Fortrea from $13.00 to $16.00 and gave the stock a “neutral” rating in a research report on Monday, July 13th. One equities research analyst has rated the stock with a Strong Buy rating, five have issued a Buy rating, four have assigned a Hold rating and one has issued a Sell rating to the company’s stock. Based on data from MarketBeat, the company has an average rating of “Moderate Buy” and an average target price of $17.75.

About Fortrea

Fortrea, Inc is a global contract development and manufacturing organization (CDMO) that provides integrated solutions for pharmaceutical and biotechnology companies. Established as a spin-off from Thermo Fisher Scientific’s Pharma Services business in October 2023, Fortrea leverages a legacy of scientific expertise and manufacturing scale to support drug development from early-stage research through commercial production. The company’s comprehensive offerings address the complex needs of both small-molecule and biologics programs, making it a single source for clients seeking to accelerate timelines and manage costs.

Fortrea’s core services encompass analytical and formulation development, process optimization, clinical and commercial manufacturing, and packaging services.