Fortrea Holdings: Initiation of Coverage – Refocusing As A Pure-Play CRO But Will It Pay Off?

Fortrea’s second quarter 2024 earnings elucidate a blend of progression and challenges in its trajectory as an
independent pure-play Clinical Research Organization (CRO). Following the spin-off from its parent company,
the organization targets both growth from biotechnology firms and expanded engagements with large
pharmaceutical companies. CEO Tom Pike articulated Fortrea’s leveraging of its robust services across various
clinical trial phases and several therapeutic areas to enhance its market position, but also acknowledged
uncertainties in contracting with biotech firms that have skewed the company’s book-to-bill ratio below the target
of 1.2, marking it at just under 1 this quarter.