Company Reports

Fortrea reported second-quarter revenue of $678 million, down 4.5% from the prior-year period, while adjusted EBITDA improved nearly 7% to roughly $59 million. Management raised its 2026 revenue and adjusted EBITDA guidance by 212 basis points and 366 basis points, respectively, at the midpoint.

Fortrea is a global, late-stage contract research organization that provides comprehensive phase 1 through phase 4 clinical trial management, clinical pharmacology, and patient access solutions. Fortrea has a lengthy 30-year history dating to the 1990s, originally part of Corning's pharmaceutical services business. In 1997, Corning spun off this segment, which was named Covance. In 2015, Laboratory Corp. of America acquired Covance for $6.1 billion.

Fortrea is a global, late-stage contract research organization that provides comprehensive phase 1 through phase 4 clinical trial management, clinical pharmacology, and patient access solutions. Fortrea has a lengthy 30-year history dating to the 1990s, originally part of Corning's pharmaceutical services business. In 1997, Corning spun off this segment, which was named Covance. In 2015, Laboratory Corp. of America acquired Covance for $6.1 billion.

Fortrea posted first-quarter revenue of $636 million, down 2.3% from the prior-year period. However, adjusted EBITDA improved 55% year over year to $47 million. Management maintained its 2026 guidance of $2.6 billion at the midpoint and adjusted EBITDA range of $190 million-$220 million.

Fortrea ended 2025 with over $2.7 billion in revenue, up 1% year over year, and adjusted EBITDA fell to $190 million from $203 million in 2024. Management projects 2026 revenue of $2.6 billion at the midpoint, a 4.5% drop from 2025. Nevertheless, Fortrea's shares closed 4.5% higher on Feb. 26.

Fortrea reported third-quarter revenue of $701 million, up 4% from the prior-year period. Management raised its 2025 revenue guidance by 283 basis points at the midpoint and maintained the midpoint of its adjusted EBITDA guidance at $185 million.

Fortrea delivered second-quarter revenue of $710 million, representing a 7% increase compared with the prior-year period. Management raised its 2025 revenue guidance by 6% at the midpoint. Backlog as of quarter end stood at $7.5 billion, and the book/bill ratio for the quarter was 0.79 times.

Fortrea is a global, late-stage contract research organization that provides comprehensive phase 1 through phase 4 clinical trial management, clinical pharmacology, and patient access solutions. Fortrea has a lengthy 30-year history dating to the 1990s, originally part of Corning's pharmaceutical services business. In 1997, Corning spun off this segment, which was named Covance. In 2015, Laboratory Corp. of America acquired Covance for $6.1 billion.

Fortrea’s stock sank by almost 15% as its CEO, Thomas Pike, announced his resignation effective May 13, 2025. The reaction from investors signals heightened uncertainty related to Fortrea’s near-term outlook, as Pike has been with the firm since January 2023 during Fortrea’s spinoff from its parent company, Labcorp. Fortrea’s lead independent director, Peter M. Neupert, will serve as interim CEO and board chair. During the first quarter, Fortrea’s revenue declined by 1.6% year over year to $651 million. Despite the near-term challenges, we maintain our fair value estimate of $15.50 per share and view the stock as attractive for long-term investors. We reiterate our High Uncertainty Rating, which is above the Medium Uncertainty Rating assigned to most of Fortrea’s peers, due to greater near-term risks associated with the spinoff and the change in executive leadership.

Fortrea is a global, late-stage contract research organization that provides comprehensive phase 1 through phase 4 clinical trial management, clinical pharmacology, and patient access solutions. Fortrea has a lengthy 30-year history dating to the 1990s, originally part of Corning's pharmaceutical services business. In 1997, Corning spun off this segment, which was named Covance. In 2015, Laboratory Corp. of America acquired Covance for $6.1 billion.

Fortrea delivered weak fourth-quarter results, with sales and earnings falling significantly below expectations and shares declined 25%. Fortrea’s full-year net loss was $328.5 million, leading to a loss of $3.67 per share. We reduced our fair value estimate to $15.50 per share from $27.20 to account for greater headwinds as a newly stand-alone company since its spinoff from Labcorp in 2023.

Fortrea is a global, late-stage contract research organization, or CRO, that provides comprehensive Phase I through IV clinical trial management, clinical pharmacology, and patient access solutions. Fortrea has a lengthy, 30-year history dating to the 1990s, originally part of Corning Incorporated's pharmaceutical services business. In 1997, Corning spun off this segment, which was named Covance. In 2015, Laboratory Corporation of America Holdings, or Labcorp, acquired Covance for $6.1 billion.

Narrow-moat Fortrea delivered strong execution in its third quarter, highlighted by a backlog of $7.5 billion, increasing nearly 3% sequentially from the second quarter. Its book/bill ratio for the quarter was a healthy 1.23, significantly higher than the second-quarter’s book/bill ratio of 0.96. Fortrea’s performance is tracking our expectations and we maintain our fair value estimate of $27.20 per share. Investors reacted very positively to its results and sent shares soaring by 30%. Given the share price movement, the stock is currently trading about 14% below our fair value estimate.

Fortrea continues to face issues as a newly stand-alone company, and management lowered its 2024 guidance after second-quarter revenue fell more than expected and one-time costs contributed to a net loss of $138 million during the quarter. These headwinds are stronger than anticipated, and we have lowered Fortrea's fair value estimate to $27.20 per share from $35.50. Investors reacted negatively to Fortrea's quarterly results, and the stock plummeted 20%. We view shares as trading at a 26% discount to our fair value estimate, representing an opportunity for long-term investors with a high degree of risk tolerance as management works to right-size the business.

Fortrea is a global, late-stage contract research organization, or CRO, that provides comprehensive Phase I through IV clinical trial management, clinical pharmacology, and patient access solutions. Fortrea has a lengthy, 30-year history dating to the 1990s, originally part of Corning Incorporated's pharmaceutical services business. In 1997, Corning spun off this segment, which was named Covance. In 2015, Laboratory Corporation of America Holdings, or Labcorp, acquired Covance for $6.1 billion.

Narrow-moat Fortrea faced issues in its first quarter due to challenges associated with its 2023 spinoff. As a result, management revised its 2024 outlook by making an 11% reduction at the midpoint to its previously issued revenue forecast. Management also lowered its adjusted EBITDA guidance by 17% at the midpoint.

Fortrea reported year-end results, highlighted by total revenue exceeding $3.1 billion. We think Fortrea’s results are solid, especially given the challenges the company has faced in the year since its spinoff from LabCorp was announced as some customers became more hesitant to book new business due to uncertainty surrounding the spinoff. Management also announced the planned divestiture of its Patient Access and Endpoint Capital businesses to Arsenal Capital Partners for $345 million. Fortrea plans to use the majority of the proceeds to pay down its $1.6 billion in gross debt. Management’s goal of the divestiture is to allow Fortrea to sharpen its focus as a pure-play contract research organization and improve its financial flexibility. The divestiture is expected to close in the second quarter of 2024.

Fortrea is a global, late-stage contract research organization, or CRO, that provides comprehensive Phase I through IV clinical trial management, clinical pharmacology, and patient access solutions. Fortrea has a lengthy, 30-year history dating to the 1990s, originally part of Corning Incorporated's pharmaceutical services business. In 1997, Corning spun off this segment, which was named Covance. In 2015, Laboratory Corporation of America Holdings, or LabCorp, acquired Covance for $6.1 billion.

Fortrea reported solid third-quarter results highlighted by revenue of $776 million. The company is tracking our expectations and we maintain our fair value estimate of $35.50 per share. We view shares as undervalued, currently trading about 8% below our fair value estimate. Investors reacted positively to Fortrea’s results, sending the stock up over 10%.

We have launched coverage of Fortrea, a global contract research organization, or CRO, which was created after LabCorp spun off its clinical development business in June 2023. LabCorp had entered the CRO space through its acquisition of Covance in 2015 for $6.1 billion. We assign Fortrea a fair value estimate of $35.50 per share, and it's currently trading in 4-star territory about 19% below our fair value estimate. We believe Fortrea has a narrow economic moat based on its significant late-stage clinical trial exposure, regulatory expertise, and strong client relationships, which are supported by intangible assets and high switching costs.