Fortrea Holdings Inc. Faces Class Action Lawsuit Amid Allegations of Misleading Statements

Investors Alert: Class Action Opportunity Against Fortrea Holdings Inc.

The law firm Robbins Geller Rudman & Dowd LLP has recently announced an opportunity for investors of Fortrea Holdings Inc. (NASDAQ: FTRE) to lead a class action lawsuit due to substantial losses incurred between July 3, 2023, and February 28, 2025. This announcement highlights critical allegations against Fortrea regarding its misleading disclosures and inflated financial expectations.

Background of the Case

Fortrea, a global clinical research organization (CRO), specializes in developing biopharmaceutical products and medical devices for its clients in the pharmaceutical and biotechnology sectors. The company became a publicly traded entity following its spin-off from Labcorp Holdings Inc. in June 2023.

During the initial spin-off, Labcorp and Fortrea engaged in several transition service agreements. These agreements stipulated that Fortrea would pay Labcorp for transitional services for a designated period. However, the class action lawsuit now claims that Fortrea misrepresented the potential revenues from its long-term projects initiated before the spin-off, known as Pre-Spin Projects.

Allegations of Misconduct

The allegations against Fortrea detail a series of violations of the Securities Exchange Act of 1934. The lawsuit asserts that the company and its executives made numerous false statements and omitted critical information that misled investors. Specifically, the allegations include:

1. Overestimation of Revenue: Fortrea allegedly overestimated the revenue likely to result from its Pre-Spin Projects for 2025. This inflated forecast of future earnings misled investors about the company's profitability.
2. Cost Savings Misrepresentation: The lawsuit contends that Fortrea exaggerated the cost savings that would arise from exiting the transition service agreements with Labcorp, inflating its earnings before interest, taxes, depreciation, and amortization (EBITDA) targets.
3. Inflated Business Viability: As a consequence of the misleading statements, Fortrea's post-spin business model's viability and financial forecasts were overstated, leading to a misrepresentation of the company's true financial health.

Price Decline Following Downgrades

Further complicating Fortrea's situation, the stock price dropped significantly following several negative reports and downgrades issued by market analysts. On September 25, 2024, Jefferies downgraded Fortrea from 'buy' to 'hold', citing weaknesses in its business model amid challenges in biotechnology funding. This resulted in a more than 12% decline in the stock price.

In addition, Baird Equity Research downgraded Fortrea's stock on December 6, 2024, after the abrupt cancellation of two scheduled conferences by the company. This announcement raised further investor concerns, resulting in an 8% decline in stock value. The narrative continued with Fortrea announcing its fourth quarter and full-year results for 2024 on March 3, 2025, revealing that its targeted financial trajectories were misaligned with earlier expectations, leading to a staggering 25% drop in stock price following this news.

Become a Lead Plaintiff

Investors who suffered substantial losses and are interested in participating as lead plaintiffs in the Fortrea class action lawsuit must act quickly. The deadline for submitting their application for lead plaintiff appointment is August 1, 2025. Under the Private Securities Litigation Reform Act of 1995, any investor who purchased or acquired Fortrea securities during the class period can seek this designation and will represent the interests of all class members.

Next Steps

Those looking to join the lawsuit can explore further details on Robbins Geller's website or by contacting attorneys J.C. Sanchez or Jennifer N. Caringal directly at 800-449-4900 or via email.

About Robbins Geller

Robbins Geller Rudman & Dowd LLP is a leading law firm in securities fraud and shareholder litigation. With a proven track record of securing significant monetary relief for investors, they rank as one of the largest plaintiffs' firms globally. In 2024 alone, they recovered over $2.5 billion for investors across various securities-related class action cases, solidifying their reputation in the legal field.

As the situation unfolds, investors should remain vigilant about their rights and the opportunity to seek damages through this class action lawsuit against Fortrea Holdings Inc.