#United States #New York #Class Action #Pomerantz #Fortrea Holdings

Pomerantz Law Firm Launches Class Action Against Fortrea Holdings, Inc.

In a significant legal move, Pomerantz LLP, a prominent law firm known for its work in corporate litigation, has officially filed a class action lawsuit against Fortrea Holdings, Inc. (NASDAQ: FTRE) along with certain top executives. The lawsuit has been registered in the U.S. District Court for the Southern District of New York and is specifically aimed at protecting the interests of all individuals and entities that purchased Fortrea securities from July 3, 2023, to February 28, 2025.

Background on Fortrea Holdings

Fortrea Holdings is a global contract research organization (CRO) specializing in biopharmaceutical and medical device development solutions for various clients in the pharmaceutical and biotech sectors. Formed as a spinoff from Labcorp in June 2023, Fortrea has aimed to leverage its operational agility and depth of expertise to provide enhanced services to its clientele. The company positions itself as a partner in the journey of bringing life-changing therapies to patients, claiming to have established a strong foundation for growth and financial performance.

Despite these assertions, the lawsuit alleges that Fortrea's management made materially false and misleading statements regarding the company's business performance and financial prospects. Specifically, it claims that there was an overestimation regarding the potential revenues from long-term projects that were already in progress prior to the company's separation from Labcorp.

Allegations of False Statements

The core of the complaint identifies several critical points regarding the alleged misrepresentation by the defendants:

• - Overestimating Revenue Contributions: The lawsuit contends that Fortrea exaggerated how much revenue its pre-spin projects would contribute to its earnings for FY2025.
• - Misstating Cost Savings: It suggests that Fortrea did not accurately disclose the realities of cost savings expected from exiting transitional agreements with Labcorp, leading to inflated EBITDA margins.
• - Inflated Business Model Viability: The complaint argues that these misstatements led to a grossly overstated assessment of the company's business and financial viability following the spinoff.

These alleged misrepresentations resulted in significant financial ramifications for investors when the truth began to surface. Share prices faced severe declines after reports by financial analysts raised concerns and identified weaknesses in Fortrea’s business model, particularly in light of pressures on biotechnology funding.

Impact on Stock Performance

In September 2024, investment bank Jefferies downgraded Fortrea’s stock from 'buy' to 'hold', indicating that anticipated cost support from exiting transitional services may not materialize as expected. Following this announcement, Fortrea shares dropped by over 12%, closing at $19.48. Similarly, in December 2024, after Baird Equity Research downgraded the stock to neutral, Fortrea’s share price fell again by over 8%.

The situation worsened when the company disclosed disappointing fourth quarter and full-year 2024 results in March 2025, indicating revenue trajectories were not aligning with previous expectations. This news propelled the stock price down further, with shares plummeting by 25% within the same day.

Legal Recourse for Claims

Investors who acquired Fortrea securities during the class period are encouraged to act promptly. The deadline to apply for the position of lead plaintiff in this class action is set for August 1, 2025. Interested parties are advised to visit Pomerantz's website or directly contact the firm for further details.

Pomerantz LLP, with extensive experience in handling securities class actions, aims to recover losses for affected investors who believe they have suffered due to the alleged misconduct from Fortrea's leadership. Founded by Abraham L. Pomerantz, the firm has a robust history of advocating for victims of corporate wrongdoing and seeking accountability within the financial sector.

For more details about the class action and to access the full complaint, you may visit Pomerantz Law's website.

Conclusion

As this case unfolds, it serves as a reminder for investors to remain vigilant regarding the financial disclosures made by companies and the potential impact of corporate governance on stock performance. The proceedings against Fortrea Holdings highlight the importance of transparency and accountability in the corporate world.