Why Is Health Care Company Fortrea Stock Diving Today?
Portfolio Pulse from Lekha Gupta
Fortrea Holdings Inc. (NASDAQ:FTRE) shares plummeted after reporting disappointing Q1 FY24 results and lowering its revenue forecast. The company missed revenue expectations with $662.1 million against a consensus of $754.6 million and reduced its FY24 revenue guidance from $3.14-$3.205 billion to $2.785-$2.855 billion. Adjusted EBITDA and EPS also fell short of expectations, with significant declines from the previous year. Fortrea is in the process of divesting its Endpoint Clinical and Fortrea Patient Access businesses to an affiliate of Arsenal Capital Partners, expected to close in Q2. Investors can also gain exposure to Fortrea through Invesco S&P SmallCap Health Care ETF (NASDAQ:PSCH) and Vanguard S&P Small-Cap 600 Value ETF (NYSE:VIOV).
May 13, 2024 | 3:21 pm
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NEGATIVE IMPACT
Fortrea Holdings reported lower than expected Q1 FY24 results and cut its revenue outlook, leading to a significant stock price drop.
The missed revenue and earnings expectations, coupled with a downward revision in revenue and EBITDA guidance, are clear negative signals for investors, likely leading to a short-term bearish outlook for FTRE.
CONFIDENCE 95
IMPORTANCE 90
RELEVANCE 100
NEGATIVE IMPACT
Invesco S&P SmallCap Health Care ETF, which includes exposure to Fortrea, may see indirect impact due to Fortrea's poor performance.
As an ETF with exposure to Fortrea, PSCH may experience some negative impact due to Fortrea's significant stock price drop, although diversified holdings may mitigate overall effect.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50
NEGATIVE IMPACT
Vanguard S&P Small-Cap 600 Value ETF, holding Fortrea stock, might be indirectly affected by Fortrea's recent financial disappointments.
Given VIOV's inclusion of Fortrea, the ETF may face indirect negative impacts from Fortrea's earnings miss and subsequent stock decline, though its diversified portfolio could lessen the blow.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50