Chemed Corporation (CHE)
NYSE:CHE
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Chemed
(NYSE:CHE)
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Rating:72Outperform
Price Target:
$409.00
▲(3.48% Upside)
Action:ReiteratedDate:02/27/26
The score is driven primarily by strong multi-year financial quality (profitability, low leverage, and reliable cash generation). Technicals are supportive with a positive trend and reasonable momentum. Offsetting factors are a moderate valuation and a mixed earnings-call outlook: improving 2026 guidance but recent operational/margin issues and an execution-dependent, back-half-weighted recovery.
Positive Factors
Consistent cash generation
Chemed consistently converts earnings into cash: operating cash flow has exceeded net income and free cash flow has been roughly 80%–88% of net income. Durable cash conversion supports reinvestment, share repurchases, and buffers cyclical pressure across both businesses.
Negative Factors
Higher write-offs and collections pressure
Rising write-offs and insurance-driven collection scrutiny materially erode Roto-Rooter cash and margins. If elevated insurer scrutiny and inconsistent billing practices persist, collections volatility could be a recurring drag on profitability and require sustained investment in billing controls.
Read all positive and negative factors
Positive Factors
Negative Factors
Consistent cash generation
Chemed consistently converts earnings into cash: operating cash flow has exceeded net income and free cash flow has been roughly 80%–88% of net income. Durable cash conversion supports reinvestment, share repurchases, and buffers cyclical pressure across both businesses.
Read all positive factors
Chemed (CHE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.44B
Dividend Yield0.51%
Average Volume (3M)294.13K
Price to Earnings (P/E)23.2
Beta (1Y)0.28
Revenue Growth6.45%
EPS Growth-4.77%
CountryUS
Employees15,695
SectorHealthcare
Sector Strength45
IndustryMedical - Care Facilities
Share Statistics
EPS (TTM)6.42
Shares Outstanding13,765,136
10 Day Avg. Volume241,934
30 Day Avg. Volume294,133
Financial Highlights & Ratios
PEG Ratio-2.78
Price to Book (P/B)6.29
Price to Sales (P/S)2.43
P/FCF Ratio18.93
Enterprise Value/Market Cap1.01
Enterprise Value/Revenue2.18
Enterprise Value/Gross Profit7.01
Enterprise Value/Ebitda13.02
Forecast
1Y Price Target
$443.00Price Target Upside12.08% Upside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)24.01
Revenue Forecast (FY)$2.67B
Chemed Business Overview & Revenue Model
Company Description
Chemed Corporation provides hospice and palliative care services to patients through a network of physicians, registered nurses, home health aides, social workers, clergy, and volunteers primarily in the United States. The company operates in two ...
How the Company Makes Money
Chemed makes money through service revenue earned by its two operating segments: (1) VITAS Healthcare (hospice services) and (2) Roto-Rooter (plumbing and drain services).\n\nVITAS Healthcare revenue model: VITAS is paid for providing hospice and ...
Chemed Earnings Call Summary
Earnings Call Date:Feb 25, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 23, 2026
Earnings Call Sentiment Neutral
The call presented a mixed picture: tangible operational progress (notably the meaningful improvement in Florida Medicare Cap exposure, VITAS admissions growth, and clear 2026 guidance with EPS upside) and concrete remediation plans (billing centralization, new SEO, commercial hiring). However, the company reported a significant quarterly miss, material margin compression at Roto-Rooter (driven by higher marketing and sharply increased water restoration write-offs), a decline in residential revenue, and near-term transition costs that weigh on H1 2026 results. Management expressed confidence in the mid-to-long-term recovery and provided specific initiatives and numerical guidance, but execution risk and timing (H2-weighted recovery) leave the outlook contingent on successful implementation of these fixes.Positive Updates
VITAS Admissions Growth
VITAS admissions totaled 17,419 in Q4 FY2025, a 6% increase year-over-year, with hospital-directed admissions and other channels contributing to improved intake.
Negative Updates
Quarterly Results Missed Expectations
Management stated the fourth quarter fell short of expectations for both subsidiaries, leading to a roughly $0.70 per share earnings miss and prompting operational changes and caution on cadence for 2026 (weighted toward H2).
Read all updates
Q4-2025 Updates
Positive
Negative
VITAS Admissions Growth
VITAS admissions totaled 17,419 in Q4 FY2025, a 6% increase year-over-year, with hospital-directed admissions and other channels contributing to improved intake.
Read all positive updates
Company Guidance
Management guided 2026 with VITAS expected to grow revenue prior to Medicare Cap by 5.5%–6.5%, average daily census up 3.5%–4.0%, and full‑year EBITDA margin (pre‑Cap) of 17.5%–18.0%, with Medicare Cap billing limitations estimated at $9.5M in 2026 versus $27.2M in 2025 (including no Florida limitation) and the more balanced admission mix showing results mainly in H2; Roto‑Rooter is forecast to grow revenue 3.0%–3.5% with an adjusted EBITDA margin of 22.5%–23.0%, helped by improved paid leads/SEO, added commercial managers and a $4M–$6M tailwind from improved water restoration billing/collections; consolidated adjusted diluted EPS (excluding certain noncash and discrete items) is guided to $23.25–$24.25 (versus $21.55 in 2025), assuming a 24.5% adjusted tax rate and 13.9M diluted shares, and management expects about 55% of consolidated adjusted net income and adjusted EBITDA (pre‑Cap) to be generated in the second half of 2026.Chemed Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
82
Very Positive
Cash Flow
77
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.53B | 2.43B | 2.26B | 2.13B | 2.14B |
| Gross Profit | 758.34M | 854.35M | 798.82M | 765.09M | 769.80M |
| EBITDA | 422.37M | 464.29M | 414.34M | 393.44M | 411.23M |
| Net Income | 265.24M | 302.00M | 272.51M | 249.62M | 268.55M |
Balance Sheet | |||||
| Total Assets | 1.64B | 1.67B | 1.67B | 1.44B | 1.34B |
| Cash, Cash Equivalents and Short-Term Investments | 74.52M | 178.35M | 263.96M | 74.13M | 32.90M |
| Total Debt | 154.76M | 140.84M | 155.11M | 247.01M | 323.54M |
| Total Liabilities | 660.61M | 549.58M | 560.22M | 643.30M | 719.45M |
| Stockholders Equity | 979.40M | 1.12B | 1.11B | 798.72M | 623.27M |
Cash Flow | |||||
| Free Cash Flow | 325.48M | 367.97M | 273.44M | 252.56M | 249.92M |
| Operating Cash Flow | 388.27M | 417.50M | 330.30M | 309.89M | 308.60M |
| Investing Cash Flow | -59.34M | -143.91M | -60.64M | -59.40M | -57.76M |
| Financing Cash Flow | -432.77M | -359.19M | -79.83M | -209.25M | -380.62M |
Chemed Technical Analysis
Neutral
395.25
Price Trends
419.23
Negative
427.67
Negative
440.67
Negative
Market Momentum
-10.95
Negative
45.35
Neutral
84.54
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CHE, the sentiment is Neutral. The current price of 395.25 is above the 20-day moving average (MA) of 384.79, below the 50-day MA of 419.23, and below the 200-day MA of 440.67, indicating a neutral trend. The MACD of -10.95 indicates Negative momentum. The RSI at 45.35 is Neutral, neither overbought nor oversold. The STOCH value of 84.54 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CHE.
Chemed Risk Analysis
Chemed disclosed 26 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 | $2.68B | 17.67 | 11.57% | 1.80% | 23.74% | -18.99% | |
75 Outperform | $1.72B | 20.66 | 9.24% | ― | 18.77% | 6.88% | |
74 Outperform | $11.90B | 29.02 | 16.58% | 0.14% | 18.61% | 35.76% | |
72 Outperform | $5.44B | 23.23 | 23.91% | 0.51% | 6.45% | -4.77% | |
63 Neutral | $4.56B | 24.29 | 15.39% | ― | 15.79% | 5.34% | |
63 Neutral | $10.00B | 10.44 | -160.63% | ― | 5.14% | 4.37% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
CHE
Chemed
395.25
-189.92
-32.46%
ADUS
Addus Homecare
92.30
-8.70
-8.61%
OPCH
Option Care Health
29.16
-4.40
-13.11%
DVA
DaVita
148.44
-4.42
-2.89%
NHC
National Healthcare
172.37
80.56
87.75%
ENSG
The Ensign Group
204.79
75.69
58.63%
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.