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Chemed Corporation (CHE)
NYSE:CHE
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Chemed
(NYSE:CHE)
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Rating:68Neutral
Price Target:
$470.00
▲(7.96% Upside)
Chemed's overall stock score reflects strong financial performance and moderate valuation, but is tempered by bearish technical indicators and operational challenges highlighted in the earnings call. The company's solid balance sheet and strategic initiatives provide a foundation for future growth, though cost pressures and cash flow trends require careful monitoring.
Positive Factors
Revenue Growth
The steady increase in VITAS revenue, driven by higher days-of-care and Medicare reimbursement rates, indicates strong demand and effective pricing strategies, supporting long-term growth.
Balance Sheet Strength
A low debt-to-equity ratio reflects prudent financial management, providing Chemed with the flexibility to invest in growth opportunities and weather economic fluctuations.
Cash Flow Generation
Robust operating cash flow indicates efficient cash generation, supporting ongoing operations and potential investments, despite recent declines in free cash flow growth.
Negative Factors
Margin Pressures
The decline in Roto-Rooter's EBITDA margin due to increased SG&A costs suggests operational inefficiencies, which could impact profitability if not addressed.
VITAS Medicare Cap Limitations
Ongoing Medicare Cap limitations pose a structural challenge, potentially affecting revenue predictability and requiring strategic adjustments to mitigate impacts.
Free Cash Flow Decline
The negative trend in free cash flow growth could constrain Chemed's ability to fund new initiatives or return capital to shareholders if it persists.
Chemed (CHE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.11B
Dividend Yield0.51%
Average Volume (3M)138.55K
Price to Earnings (P/E)22.8
Beta (1Y)0.26
Revenue Growth6.45%
EPS Growth-4.77%
CountryUS
Employees15,695
SectorHealthcare
Sector Strength45
IndustryMedical - Care Facilities
Share Statistics
EPS (TTM)5.27
Shares Outstanding14,164,195
10 Day Avg. Volume147,660
30 Day Avg. Volume138,548
Financial Highlights & Ratios
PEG Ratio2.40
Price to Book (P/B)7.11
Price to Sales (P/S)3.27
P/FCF Ratio21.63
Enterprise Value/Market Cap1.06
Enterprise Value/Revenue2.55
Enterprise Value/Gross Profit7.92
Enterprise Value/Ebitda14.76
Forecast
1Y Price Target
$574.25Price Target Upside31.91% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)22.17
Revenue Forecast (FY)$2.55B
Chemed Business Overview & Revenue Model
Company DescriptionChemed Corporation (CHE) is a leading provider of hospice and palliative care services through its VITAS Healthcare subsidiary, as well as a provider of dental products and services through its Roto-Rooter subsidiary. The company operates primarily in the healthcare sector, focusing on delivering high-quality patient care and support in end-of-life situations, while also providing plumbing and drain cleaning services across the United States. Chemed's commitment to improving the quality of life for patients and their families is central to its mission.
How the Company Makes MoneyChemed generates revenue primarily through its VITAS Healthcare subsidiary, which offers hospice care services. The company is reimbursed for these services by Medicare, Medicaid, and private insurance providers, with a significant portion of its revenue coming from Medicare reimbursements. Additionally, Chemed's Roto-Rooter subsidiary contributes to the company's revenue through plumbing and drain cleaning services, which are billed on a fee-for-service basis. Key partnerships with healthcare providers and insurance companies enhance Chemed's ability to attract patients and secure reimbursements, while also expanding its service offerings in both hospice care and plumbing services. Overall, the combination of these revenue streams, along with operational efficiencies and a growing demand for hospice services, contributes to Chemed's financial performance.
Chemed Earnings Call Summary
Earnings Call Date:Oct 31, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 24, 2026
Earnings Call Sentiment Neutral
The earnings call demonstrated growth in key areas such as VITAS admissions and Roto-Rooter residential plumbing revenues. However, margin pressures and declines in independent contractor revenues for Roto-Rooter, alongside challenges with VITAS Medicare Cap limitations, balanced out the positive aspects. The company's strategic initiatives show promise but are tempered by operational challenges.Q3-2025 Updates
Positive Updates
VITAS Admissions Improvement
VITAS achieved a 5.6% increase in admissions during the quarter, with a focus on hospital-based admissions reaching a high of 44.5%, marking a post-pandemic period high.
Roto-Rooter Residential Plumbing Growth
Residential plumbing revenue for Roto-Rooter increased by 8.2% in the third quarter compared to the same period in 2024, driven by targeted campaigns.
VITAS Revenue Growth
VITAS net revenue increased by 4.2% compared to the prior year, with a 2.5% increase in days-of-care and a 4.1% increase in Medicare reimbursement rates.
Roto-Rooter Branch Revenue Growth
Roto-Rooter branch residential revenue increased by 3.4% and commercial revenue increased by 2.8% for the quarter compared to the prior year.
Negative Updates
Roto-Rooter Independent Contractor Decline
Revenue from independent contractors declined 4.7% in the third quarter of 2025 compared to the same period of 2024, attributed to resourcing constraints.
Roto-Rooter Margin Pressure
Roto-Rooter's adjusted EBITDA decreased by 12.4% year-over-year, with a 351 basis point decline in adjusted EBITDA margin due to increased SG&A costs from paid leads.
VITAS Adjusted EBITDA Decline
Adjusted EBITDA for VITAS excluding Medicare Cap declined by 3.8% from the prior year, with a 157 basis point decrease in adjusted EBITDA margin.
VITAS Medicare Cap Limitations
A $6.1 million Medicare Cap billing limitation was accrued in the third quarter, with $4.6 million for Florida and $1.5 million for other programs, indicating ongoing challenges.
Company Guidance
In the third quarter of 2025, Chemed Corporation provided guidance indicating a mixed performance across its divisions, with VITAS Healthcare showing a 4.2% increase in net revenue to $407.7 million, driven by a 2.5% increase in days-of-care and a 4.1% rise in Medicare reimbursement rates, despite a 3.8% decline in adjusted EBITDA. The company successfully navigated the Florida Medicare Cap issue, reducing the expected billing limitation to $18.9 million and projecting no cap limitation for 2026. Roto-Rooter reported a 1.1% revenue increase, with residential and commercial revenues rising by 3.4% and 2.8%, respectively, though independent contractor revenue fell by 4.7%. The transition from unpaid to paid leads led to a 3.6 million increase in SG&A costs, impacting EBITDA margins. Despite these challenges, Chemed reaffirmed its annual guidance of $22 to $22.30 per share, excluding specific noncash expenses and discrete items, citing seasonal factors and operational improvements expected in the fourth quarter as key contributors to achieving its financial targets.Chemed Financial Statement Overview
Summary
Chemed shows a strong financial performance with consistent revenue growth and profitability. The balance sheet is solid with low leverage, and cash flow generation remains robust despite recent declines in free cash flow growth. The company is well-positioned in the medical care facilities industry, but should monitor cost pressures and cash flow trends closely.Income Statement
Chemed demonstrates solid revenue growth with a TTM increase of 7.45%, although slightly lower than previous years. The gross profit margin has decreased to 30.97% in the TTM, indicating potential cost pressures. Net profit margin is stable at 11.02%, reflecting consistent profitability. However, the EBIT and EBITDA margins have slightly declined, suggesting some operational efficiency challenges.75
Positive
Balance Sheet
The balance sheet is strong with a low debt-to-equity ratio of 0.13, indicating prudent financial management. Return on equity is robust at 24.37%, showcasing effective use of equity. The equity ratio is healthy, reflecting a solid capital structure. Overall, the company maintains a stable financial position with manageable leverage.82
Very Positive
Cash Flow
Operating cash flow remains strong with a coverage ratio of 1.44, indicating good cash generation relative to net income. However, free cash flow growth has turned negative in the TTM, which could be a concern if it persists. The free cash flow to net income ratio is healthy at 85.89%, suggesting efficient cash conversion.68
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.53B | 2.43B | 2.26B | 2.13B | 2.14B | 2.08B |
| Gross Profit | 815.90M | 854.35M | 798.82M | 765.09M | 769.80M | 701.39M |
| EBITDA | 438.07M | 464.29M | 414.34M | 393.44M | 411.23M | 454.93M |
| Net Income | 278.81M | 302.00M | 272.51M | 249.62M | 268.55M | 319.47M |
Balance Sheet | ||||||
| Total Assets | 1.62B | 1.67B | 1.67B | 1.44B | 1.34B | 1.43B |
| Cash, Cash Equivalents and Short-Term Investments | 129.75M | 178.35M | 263.96M | 74.13M | 32.90M | 162.68M |
| Total Debt | 141.47M | 140.84M | 155.11M | 247.01M | 323.54M | 135.41M |
| Total Liabilities | 546.94M | 549.58M | 560.22M | 643.30M | 719.45M | 533.71M |
| Stockholders Equity | 1.08B | 1.12B | 1.11B | 798.72M | 623.27M | 901.20M |
Cash Flow | ||||||
| Free Cash Flow | 360.44M | 367.97M | 273.44M | 252.56M | 249.92M | 430.46M |
| Operating Cash Flow | 419.65M | 417.50M | 330.30M | 309.89M | 308.60M | 489.29M |
| Investing Cash Flow | -55.91M | -143.91M | -60.64M | -59.40M | -57.76M | -61.56M |
| Financing Cash Flow | -472.44M | -359.19M | -79.83M | -209.25M | -380.62M | -271.21M |
Chemed Technical Analysis
Negative
435.33
Price Trends
435.28
Negative
441.06
Negative
497.17
Negative
Market Momentum
-2.33
Negative
48.57
Neutral
77.26
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CHE, the sentiment is Negative. The current price of 435.33 is above the 20-day moving average (MA) of 430.59, above the 50-day MA of 435.28, and below the 200-day MA of 497.17, indicating a bearish trend. The MACD of -2.33 indicates Negative momentum. The RSI at 48.57 is Neutral, neither overbought nor oversold. The STOCH value of 77.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CHE.
Chemed Risk Analysis
Chemed disclosed 25 risk factors in its most recent earnings report. Chemed reported the most risks in the "Ability to Sell" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Chemed Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $10.23B | 31.42 | 16.98% | 0.14% | 18.61% | 35.76% | |
74 Outperform | $2.09B | 23.99 | 8.58% | ― | 18.77% | 6.88% | |
74 Outperform | $2.20B | 21.85 | 9.94% | 1.76% | 23.74% | -18.99% | |
73 Outperform | $5.23B | 25.73 | 15.02% | ― | 15.79% | 5.34% | |
68 Neutral | $6.11B | 22.80 | 24.11% | 0.51% | 6.45% | -4.77% | |
59 Neutral | $8.36B | 11.96 | ― | ― | 5.14% | 4.37% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
CHE
Chemed
435.33
-80.47
-15.60%
ADUS
Addus Homecare
112.82
-16.04
-12.45%
OPCH
Option Care Health
32.51
9.59
41.84%
DVA
DaVita
115.20
-37.82
-24.72%
NHC
National Healthcare
141.64
33.25
30.68%
ENSG
The Ensign Group
181.39
47.77
35.75%
Chemed Corporate Events
Chemed Reports Mixed Q3 2025 Earnings Performance
Oct 30, 2025
Chemed Corporation is a diversified company operating in the healthcare and plumbing sectors, primarily through its subsidiaries VITAS Healthcare Corporation and Roto-Rooter. VITAS is the largest provider of end-of-life care in the United States, while Roto-Rooter is the leading provider of plumbing and drain cleaning services in North America.
Chemed’s Earnings Call: Growth Amid Challenges
Oct 30, 2025
Chemed’s Recent Earnings Call: A Mixed Bag of Growth and Challenges
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.