Value
6.1/10data confidence 83%| Component | Sub-score |
|---|---|
| P/S | 9.9 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 7.7 |
| PEG | 10.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 16.0x
- ▸PEG: 0.34
FTRE · Why this verdict
Why Fortrea Holdings (FTRE) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score4.0/10
ConfidenceHIGH
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Fortrea's quality score sits well below the platform's investment floor, driven by no competitive moat and a weak Piotroski F-Score of 2/9. Bear case | The Piotroski F-Score should improve above 4/9 and the quality score should rise toward 4.0 over the next 12 months. | →Stable |
| CounterAs a recently spun-off CRO still building an independent operating track record, temporarily weak quality metrics may reflect transition costs rather than a permanently impaired business. | ||
Fortrea failed the platform's momentum gate alongside declining revenue (-2% YoY), reinforcing the bearish quality picture. Engine gate (failed) | The momentum score should recover and revenue growth should turn positive from -2% over the next 12 months. | →Stable |
| CounterThe setup is described as range-bound with RSI at a neutral 54, suggesting consolidation rather than a confirmed breakdown. | ||
Shares trade at a low PEG ratio (0.34) with a 16.0x forward P/E, suggesting some valuation support despite the weak fundamentals elsewhere. Valuation breakdown | The PEG ratio should stay below 0.6 over the next 12 months. | →Stable |
| CounterA low PEG ratio calculated off declining or negative near-term earnings can be misleading and doesn't necessarily indicate genuine undervaluation. | ||
Short interest sits at an elevated 12% of float alongside high implied volatility (94%), reflecting substantial bearish positioning and expected price turbulence. Key risks | Short interest should decline from 12% and implied volatility should moderate from 94% over the next 12 months. | →Stable |
| CounterElevated short interest combined with a still-meaningful earnings beat rate (2 of the last 4 quarters, 73.7% average surprise) creates short-squeeze potential on a positive catalyst. | ||
Fortrea's quality score sits well below the platform's investment floor, driven by no competitive moat and a weak Piotroski F-Score of 2/9.
→StableBear case
- Expectation
- The Piotroski F-Score should improve above 4/9 and the quality score should rise toward 4.0 over the next 12 months.
CounterAs a recently spun-off CRO still building an independent operating track record, temporarily weak quality metrics may reflect transition costs rather than a permanently impaired business.
Fortrea failed the platform's momentum gate alongside declining revenue (-2% YoY), reinforcing the bearish quality picture.
→StableEngine gate (failed)
- Expectation
- The momentum score should recover and revenue growth should turn positive from -2% over the next 12 months.
CounterThe setup is described as range-bound with RSI at a neutral 54, suggesting consolidation rather than a confirmed breakdown.
Shares trade at a low PEG ratio (0.34) with a 16.0x forward P/E, suggesting some valuation support despite the weak fundamentals elsewhere.
→StableValuation breakdown
- Expectation
- The PEG ratio should stay below 0.6 over the next 12 months.
CounterA low PEG ratio calculated off declining or negative near-term earnings can be misleading and doesn't necessarily indicate genuine undervaluation.
Short interest sits at an elevated 12% of float alongside high implied volatility (94%), reflecting substantial bearish positioning and expected price turbulence.
→StableKey risks
- Expectation
- Short interest should decline from 12% and implied volatility should moderate from 94% over the next 12 months.
CounterElevated short interest combined with a still-meaningful earnings beat rate (2 of the last 4 quarters, 73.7% average surprise) creates short-squeeze potential on a positive catalyst.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Fortrea Holdings sits below the platform's quality floor with declining revenue and a failed momentum gate, though a cheap growth-adjusted valuation and short-interest-driven squeeze potential offer a partial offset.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
1.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.0 |
| Gross margin | 0.0 |
| Op margin | 0.2 |
| Net margin | 0.0 |
| Current ratio | 3.8 |
| Moat | 2.5 |
| Piotroski F | 2.2 |
- ▸No competitive moat
- ▸Weak Piotroski F-Score: 2/9
- ▸Quality concerns
Growth
1.9/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 1.9 |
- ▸Declining revenue: -2%
Momentum
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 6.5 |
| OBV | 6.0 |
| MA position | 9.0 |
| Volume | 0.8 |
- ▸Above 200-day MA
Sentiment
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.0 |
| Price target | 3.8 |
| erm sentiment | 5.0 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.0 |
- ▸Insider selling (low materiality) — $256,245 (0.016% of mkt cap)
Peer rank
3.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 9.9 |
| quality rank | 2.4 |
| growth rank | 3.3 |
Technical
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.5 |
| support resistance | 1.4 |
| 52w position | 9.1 |
Risk (lower is worse)
2.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 3.9 |
| days to cover | 2.1 |
| volatility | 0.0 |
| put call | 3.3 |
| implied vol | 0.0 |
| max pain risk | 3.0 |
| beta | 3.3 |
| debt equity | 2.9 |
- ▸High IV: 105%
- ▸Above max pain $2
- ▸Concentration risks: 2 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
- ▸Earnings concerns: 2B/2M
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (6)
- MOMENTUM:5.5>=4.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:30d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.3=NEGATIVE
Warning (2)
- MOMENTUM:5.5<5.5 (soft — BUY_NOW allowed but watch)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-1.34
Upside
-20.1%
Downside
15.0%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 63, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Binary industry: Biotechnology
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Value at 6.1 could not lift the engine output above the verdict floor. Failed gate signal: ASYMMETRY:-1.3=NEGATIVE.
The strongest dimensions are Value at 6.1, Catalyst at 5.8, and Momentum at 5.5; the weakest are Quality at 1.1, Growth at 1.9, and Risk (lower is worse) at 2.3. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of -1.34 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Quality Below Floor
Trip ifPiotroski F-Score rises above 4 out of 9 from the current 2, showing fundamental improvement.
- P2Declining Revenue Momentum Gate Failure
Trip ifRevenue growth rises above 0% YoY from the current -2%, and momentum score rises above 4.5 from the current 4.3, showing both concerns have reversed.
- P3Cheap Growth Adjusted Valuation
Trip ifPEG ratio rises above 1.0 from the current 0.34 while revenue growth stays negative, showing the valuation support has failed.
- P4High Short Interest Elevated Volatility
Trip ifShort interest falls below 8% of float from the current 12%, and implied volatility falls below 70% from the current 94%, showing the bearish positioning and risk pricing have eased.