Fortrea (NASDAQ:FTRE) Releases Quarterly Earnings Results, Beats Estimates By $0.13 EPS

Key Points

• Fortrea reported Q1 EPS of $0.16, beating consensus by $0.13 with revenue of $636.5M and adjusted EBITDA of $47M, and management reiterated full‑year guidance of $2.55B–$2.65B revenue and $190M–$220M adjusted EBITDA.
• Rightsizing actions delivered roughly $16M gross (~$9M net) in quarterly savings, and management is targeting a multi‑year objective of reaching a mid‑teens adjusted EBITDA margin over 3–5 years.
• Cash, liquidity and commercial momentum improved: Q1 operating cash flow was negative $17M (much improved), available liquidity tops $0.5B with no revolver use, and book‑to‑bill was 1.15x driven by biotech wins and double‑digit China pipeline growth.

Fortrea (NASDAQ:FTRE - Get Free Report) posted its quarterly earnings results on Tuesday. The company reported $0.16 earnings per share for the quarter, topping the consensus estimate of $0.03 by $0.13, FiscalAI reports. Fortrea had a positive return on equity of 6.23% and a negative net margin of 36.21%.The firm had revenue of $636.50 million during the quarter, compared to analysts' expectations of $627.42 million.

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

• Fortrea reported a solid Q1 with adjusted EBITDA of $47M, improved adjusted net income ($15.2M) and reiterated full‑year guidance of $2.55B–$2.65B revenue and $190M–$220M adjusted EBITDA, supporting the company’s path back to profitability.
• Commercial momentum improved: Q1 book‑to‑bill was 1.15x (1.05x TTM), with stronger biotech wins, more RFPs (including new‑to‑Fortrea biotechs), and double‑digit growth in the China pipeline.
• Management launched Fortrea Intelligent Technology (FIT), an AI/ML platform integrated into Xcellerate, receiving positive early feedback but described as “early days” with uncertain near‑term financial impact.
• Rightsizing produced ~$16M gross (~$9M net) of quarterly savings and management reiterated a multi‑year target to reach mid‑teens adjusted EBITDA margin over 3–5 years, driven by cost optimization and revenue diversification.
• Cash and liquidity improved materially: Q1 operating cash flow was negative $17M (much better than prior year) and available liquidity exceeds $0.5B, with no revolver usage in the quarter.

Fortrea Stock Performance

Fortrea stock traded up $1.94 during mid-day trading on Tuesday, reaching $14.19. 593,295 shares of the stock traded hands, compared to its average volume of 1,540,323. The stock has a market capitalization of $1.34 billion, a PE ratio of -1.30, a price-to-earnings-growth ratio of 0.45 and a beta of 1.92. The company has a debt-to-equity ratio of 1.86, a current ratio of 0.98 and a quick ratio of 0.98. Fortrea has a 12-month low of $3.97 and a 12-month high of $18.67. The business's 50-day moving average is $9.88 and its 200-day moving average is $12.46.

Wall Street Analysts Forecast Growth

FTRE has been the subject of several recent analyst reports. Barclays decreased their price target on Fortrea from $12.00 to $11.00 and set an "equal weight" rating for the company in a research note on Tuesday, April 14th. Weiss Ratings reiterated a "sell (d-)" rating on shares of Fortrea in a research report on Tuesday, April 21st. TD Cowen upgraded Fortrea from a "hold" rating to a "buy" rating and set a $15.00 price objective for the company in a research report on Monday, March 9th. Evercore set a $25.00 price objective on Fortrea and gave the company an "outperform" rating in a research report on Tuesday, January 6th. Finally, Robert W. Baird reduced their price objective on Fortrea from $19.00 to $16.00 and set an "outperform" rating for the company in a research report on Friday, February 27th. Five research analysts have rated the stock with a Buy rating, five have issued a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat, Fortrea presently has an average rating of "Hold" and a consensus target price of $16.05.

Insider Buying and Selling

In other Fortrea news, CFO Jill G. Mcconnell sold 5,061 shares of the business's stock in a transaction dated Tuesday, March 10th. The stock was sold at an average price of $9.07, for a total transaction of $45,903.27. Following the completion of the sale, the chief financial officer owned 69,796 shares of the company's stock, valued at approximately $633,049.72. The trade was a 6.76% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is accessible through the SEC website. Insiders sold a total of 9,673 shares of company stock worth $92,242 in the last three months. 0.38% of the stock is currently owned by corporate insiders.

Institutional Trading of Fortrea

Hedge funds have recently bought and sold shares of the stock. Osaic Holdings Inc. grew its holdings in Fortrea by 74.3% during the second quarter. Osaic Holdings Inc. now owns 6,844 shares of the company's stock valued at $38,000 after purchasing an additional 2,918 shares during the period. Tower Research Capital LLC TRC grew its holdings in Fortrea by 137.0% during the second quarter. Tower Research Capital LLC TRC now owns 8,713 shares of the company's stock valued at $43,000 after purchasing an additional 5,036 shares during the period. Toronto Dominion Bank bought a new stake in Fortrea during the fourth quarter valued at about $51,000. EverSource Wealth Advisors LLC grew its holdings in Fortrea by 662.9% during the second quarter. EverSource Wealth Advisors LLC now owns 11,963 shares of the company's stock valued at $59,000 after purchasing an additional 10,395 shares during the period. Finally, Franklin Resources Inc. bought a new stake in Fortrea during the second quarter valued at about $60,000.

Fortrea Company Profile

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.

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