Pomerantz Law Firm Files Class Action Against Fortrea Holdings Over Securities Violations

Pomerantz Law Firm Files Class Action Against Fortrea Holdings

On July 2, 2025, Pomerantz LLP announced the filing of a significant class action lawsuit against Fortrea Holdings, Inc. (NASDAQ: FTRE) and several of its top officials. This lawsuit has been filed in the United States District Court for the Southern District of New York under docket number 25-cv-04630. It seeks redress for investors who acquired Fortrea securities between July 3, 2023, and February 28, 2025, a period during which the defendants allegedly made false statements regarding the company's financial health and operational viability, thereby violating federal securities laws.

Background of the Costly Violations

Fortrea is recognized as a global contract research organization (CRO) that provides leading biopharmaceutical product development, having been spun off from Labcorp Holdings in June 2023. The suit alleges that during the designated Class Period, Fortrea and its executives misled investors concerning the expected contributions of ongoing projects to the company’s revenue. Specifically, the lawsuit claims that the defendants exaggerated revenue prospects from these pre-spin projects, miscalculated potential cost savings from transition services, and communicated unrealistic EBITDA targets for 2025, all of which significantly inflated the company’s perceived fiscal stability and market value.

In March 2024, Fortrea asserted it would achieve adjusted EBITDA margins of approximately 13% for the year 2025. However, by August of the same year, this target was slightly downgraded to a range of 11% to 12%, despite the company maintaining a narrative of operational improvements. Yet, these adjustments appeared optimistic in light of ongoing challenges within the biotech sector and cost-rich service expectations following its spin-off.

Unraveling of Fortrea’s Financial Assumptions

The complaint strongly outlines how the assurances provided by Fortrea during investor discussions were inconsistent with market realities. Essential details regarding the financial impacts of pre-spin projects went unaddressed, ultimately leading to a misleading depiction of the company's growth trajectory. Notably, on September 25, 2024, a report by Jefferies downgraded Fortrea’s investment rating from ‘buy’ to ‘hold’, citing doubts about the fundamental soundness of its business amidst a tightening funding environment for biotechnologies. Following this report, Fortrea’s stock plummeted by over 12%, a clear indication of investor discontent as the valuations did not hold post-disclosure of critical financial misjudgments.

Subsequently, the risk assessments rose again in December 2024 after Baird Equity Research downgraded Fortrea to ‘neutral’, raising concerns about the company’s sudden changes in communication regarding its operational strategy. This issue seemed to crystallize further when Fortrea reported its delayed revenue expectations in a fourth-quarter update on March 3, 2025. The firm revealed comprehensive revenue shortfalls, citing older projects failing to perform as anticipated due to diminished productivity, which would continue to burden future financial outcomes.

Seeking Justice for Affected Investors

Investors impacted by the discrepancies between Fortrea’s public statements and actual performance are encouraged to act swiftly; the deadline to request appointment as a Lead Plaintiff for the case is set for August 1, 2025. Potential claimants can access further details and a copy of the complaint through Pomerantz LLP's website.

Pomerantz LLP, established by securities litigation pioneer Abraham L. Pomerantz, has a long-standing reputation for protecting investors’ rights and pursuing corporations that engage in fraudulent conduct. With a history of securing billions in damages for class members, Pomerantz continues to be a formidable force against securities fraud in the industry. As the situation evolves, affected investors are watching closely, hoping for restitution as this legal battle unfolds.