Fortrea Holdings, Inc. (FTRE) Securities Class Action Lawsuit Update [June 26, 2025]

Introduction  to Fortrea Holdings, Inc. (FTRE) Lawsuit

A securities fraud class action lawsuit has been filed against Fortrea Holdings Inc. (“Fortrea”) (NASDAQ: FTRE) on behalf of investors who purchased Fortrea common stock between July 3, 2023, and February 28, 2025 (the “Class Period”). The complaint alleges that Fortrea and key executives misled investors about the company’s financial outlook, specifically its post-spin business model, 2025 EBITDA targets, and projected savings from exiting Transition Services Agreements (TSAs) following its spin-off from Labcorp.  

Fortrea Holdings, Inc. (FTRE) Lawsuit Case Details  

Caption: Deslande v. Fortrea Holdings, Inc., et al.  

Case No.: 1:25-cv-04630 

Jurisdicton: U.S. District Court, Southern District of New York 

Filed on: June 2, 2025   

Fortrea Holdings, Inc. (FTRE) Company Profile  

Fortrea Holdings Inc. is a global contract research organization (CRO).  It provides clinical trial and commercialization services to pharmaceutical, biotech, and medical device companies.  Fortrea was formerly a business unit of Labcorp, until it spun-off in July 2023.  Fortrea operates through two primary segments: Clinical Services and Enabling Services.  

Class Period:  

July 3, 2023 to February 28, 2025 

Investors who acquired Fortrea securities during the class period might be eligible to join the Fortrea Holdings Lawsuit. 

Allegations in the Fortrea Holdings, Inc. (FTRE) Securities Lawsuit  

The filed complaint alleges Fortrea misled investors about its finances post-spin off.  Specifically, plaintiffs claim Fortea’s public statements deceived investors regarding its revenue base, margins, and the cost savings it would garner from exiting Labcorp.   

In 2023 and 2024, Fortrea issued a series of upbeat statements promoting its independence, scalability, and cost-efficiency. In Fortrea’s inaugural press release on July 3, 2023, and in its August/November 2023 earnings calls, CEO Thomas Pike and CFO Jill McConnell repeatedly underscored the company’s “margin expansion roadmap” and “detailed TSA exit plans.” On the Q3 2023 call, management stated that 2024 would be focused on executing those exits and beginning SG&A optimization.  Executives touting those changes were essential to reaching EBITDA margin targets. 

Investors got further reassurance during the Q4 2023 earnings call on March 11, 2024.  During that call, Fortrea reaffirmed its target of achieving 13% adjusted EBITDA margins in 2025.  Management attributed this likelihood to a combination of revenue growth, productivity gains, and the cost efficiency of exiting TSAs. That same narrative carried into the company’s 2023 Form 10-K, which stated that TSA exits would be a key contributor to cost control.  The Form 10-K also said pre-spin projects offered strong visibility into future revenue. 

But on September 25, 2024, investors were shocked when investment bank Jefferies downgraded Fortrea.  Jeffries based the downgrade on the CRO’s exposure to biotech funding challenges. The report flagged two concerns: that TSA exits would merely swap internal costs for external ones with little net gain, and that Fortrea’s revenue growth trajectory was weakening. Fortrea stock plunged more than 12% following the downgrade. 

Doubts about Fortrea deepened in December when the Company abruptly pulled out of two scheduled investor conferences. Baird subsequently cut its rating from Outperform to Neutral, citing poor communication and growing sector volatility. The stock fell another 8%. 

The investor lawsuit claims Fortrea’s conduct violated federal securities laws, such as the Securities Exchange Act of 1934. Plaintiffs claim Fortrea inflated its stock price by overstating its margin outlook, mischaracterizing its TSA cost structure, and concealing the weakening contribution of legacy contracts.  Plaintiffs also say Fortrea executives their own sold shares at elevated prices before the company’s financial reset, suggesting executives knew it was time to bail on the sinking stock before the rest of the market did.  

The Truth Emerges 

The full picture emerged on March 3, 2025, when Fortrea announced its Q4 2024 earnings. Management admitted that its 2025 financial targets were no longer attainable, revealing that revenue from pre-spin contracts (many late in their lifecycle) would contribute far less than forecasted. CEO Pike acknowledged that newer business wasn’t ramping fast enough to offset these shortfalls and that previous assumptions about growth and profitability were inflated. Shares went into freefall and lost 25% on the news. 

Market Reaction 

From September 2024 to March 2025, Fortrea’s stock sank more than 45%, falling from above $22 per share down to $10.38.  

Post-Class Period, Fitch Ratings issued a report downgrading Fortrea, projecting 2025 EBITDA margins of just 7–8%, well below the 11–13% guidance Fortrea had affirmed for over a year.  

Next Steps  

• Submissions for lead plaintiff are due August 2, 2025. 

• The Court will issue its order for lead plaintiff and counsel in the weeks after submissions are due.    

• The Court will then consider motion for class certification.     

• The Court will later consider a Motion to Dismiss.    

To learn if you are eligible for recovery under the Fortrea securities class action lawsuit, visit the case submission page here.  

Disclaimer: This shareholder alert is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for personalized guidance. No specific outcomes are guaranteed.