The law firm of Kirby McInerney LLP reminds investors who purchased Fortrea Holdings Inc. (“Fortrea” or the “Company”) (NASDAQ: FTRE) securities to contact Thomas W. Elrod of Kirby McInerney LLP by email at investigations@kmllp.com, or fill out the contact form below, to discuss your rights or interests with respect to the securities fraud class action lawsuit against the Company.

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The lawsuit was filed on behalf of investors who acquired Fortrea securities from July 3, 2023, through February 28, 2025 (“the Class Period”). Investors have until August 1, 2025, to apply to the Court to be appointed as lead plaintiff in the lawsuit.

Fortrea is a global contract research organization (“CRO”) that provides biopharmaceutical product and medical device development solutions to pharmaceutical, biotechnology, and medical device customers.

Fortrea was formerly the clinical development and commercialization services business of Labcorp Holdings Inc. (“Labcorp”), a life sciences and healthcare company. In June 2023, Labcorp spun off Fortrea as a standalone, publicly traded company (the “Spin-Off” or the “Spin”). At the time of the Spin-Off, certain of the long-term projects in Fortrea’s portfolio remained ongoing (the “Pre-Spin Projects”).

In connection with the Spin-Off, Labcorp and Fortrea entered into several transition services agreements (the “TSAs”), pursuant to which Fortrea pays Labcorp to provide certain transitional services for a set period, including information technology (“IT”) applications, network and security support and hosting, as well as finance, human resources, marketing, and other administrative support. However, since completing the Spin-Off, Fortrea has consistently represented that it has “built detailed TSA exit plans” designed to save costs and improve margins by investing in developing its own infrastructure.

In March 2024, the Company announced that it was targeting 2025 adjusted EBITDA margins on a full-year basis of approximately 13%. In August 2024, the Company slightly lowered its targeted adjusted 2025 EBITDA margins to the “11% to 12% range,” but touted that this would still “represent a roughly 300 basis points improvement at the midpoint versus 2024, and broadly a 30% to 40% increase in adjusted EBITDA dollars delivered.”

On September 25, 2024, the investment bank Jefferies published a report (the “Jefferies Report”) downgrading Fortrea from buy to hold. Among other things, the Jefferies Report cited perceived weaknesses in Fortrea’s business model as a contract research organization amid pressure on biotechnology funding and suggested that the cost savings Fortrea expects to achieve by exiting the TSAs are “not as material as [o]ne [m]ight think,” stating that “IT infrastructure costs to exit the TSAs are already non-GAAPed out of adjusted EBITDA. Thus, once TSAs are exited, Fortrea will just be replacing TSA costs with internal operating costs.” On this news, the price of Fortrea shares declined by $2.73 per share, from $22.21 per share on September 24, 2024, to close at $19.48 on September 25, 2025.

Then, on December 6, 2024, market analyst Baird Equity Research (“Baird”) downgraded Fortrea to neutral from outperform after the Company abruptly cancelled two scheduled conferences. A Baird analyst said that “given our ongoing concerns around the sector, Fortrea's choppy history post spin, and lack of clarity on the abrupt communications course change, we cannot recommend an actionable investment (buy or sell)[.]” On this news, the price of Fortrea shares declined by $1.90 per share from $23.57 per share on December 5, 2024, to close at $21.67 on December 6, 2024.

Finally, on March 3, 2025, Fortrea announced its fourth quarter and full year 2024 financial results, disclosing that its “targeted revenue and adjusted EBITDA trajectories for 2025 [were] not in line with [its] prior expectations.” Specifically, in an earnings call held that same day, Fortrea revealed that the Company’s Pre-Spin projects are “late in their life cycle [and] have less revenue and less profitability than expected for 2025” and that “post-spin work is not coming on fast enough to offset the pre-spin contract economics.” The Company also said this “older versus newer mix issue will continue to negatively impact Fortrea's financial performance during 2025.” On this news, the price of Fortrea shares declined by $3.47 per share, or approximately 25.1%, from $13.85 per share on February 28, 2025, to close at $10.38 on March 3, 2025.

The complaint alleges that defendants, throughout the Class Period, failed to disclose that: (1) Fortrea overestimated the amount of revenue the Pre-Spin Projects were likely to contribute to the Company's 2025 earnings; (2) Fortrea overstated the cost savings it would likely achieve by exiting the TSAs; and (3) as a result, the Company's previously announced EBITDA targets for 2025 were inflated.

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Kirby McInerney LLP is a New York-based plaintiffs’ law firm concentrating in securities, antitrust, whistleblower, and consumer litigation. The firm’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. Additional information about the firm can be found at Kirby McInerney LLP’s website.

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