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Chemed (CHE)
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Chemed (CHE) AI Stock Analysis

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CHE

Chemed

(NYSE:CHE)

Rating:62Neutral
Price Target:
$437.00
▲(0.48% Upside)
Chemed's overall stock score of 62 reflects strong financial performance, tempered by negative technical indicators and a conservative valuation. The recent earnings call and corporate event of reduced guidance introduce additional uncertainty. The company's robust financial health supports its resilience against these challenges, yet the bearish technical outlook and market reactions to revised guidance weigh on sentiment.
Positive Factors
Demand for Services
Google searches for 'plumbing' in Q1 2025 jumped 16% quarter-over-quarter, indicating strong demand for Roto-Rooter services.
Roto-Rooter Growth
Roto revenues came in much better and grew year over year, which is a welcome sign given the declines last year.
Strategic Financial Moves
CHE's balance sheet is strong, providing flexibility to pursue strategic M&A and share repurchases, with a solid track record in capital deployment.
Negative Factors
Admissions and Demand Challenges
Admissions in Florida were weaker in April-May, and Roto residential was worse than expected.
Florida Reimbursement Challenges
A recent increase in reimbursements, specifically in FL, is causing providers in that state to bump up against the national payment cap that Medicare has set, creating a temporary headwind for providers there.
Medicare Cap Issues
The impact of recent issues related to the Medicare cap will likely carry over into '26 and limit the company's ability to achieve the Street's current EBITDA growth expectations.

Chemed (CHE) vs. SPDR S&P 500 ETF (SPY)

Chemed Business Overview & Revenue Model

Company DescriptionChemed Corporation (CHE) is a diversified public company that operates through two primary subsidiaries: VITAS Healthcare and Roto-Rooter. VITAS Healthcare is a leading provider of end-of-life hospice care services in the United States, delivering a range of healthcare services to terminally ill patients and their families. Roto-Rooter is the largest provider of plumbing and drain cleaning services in North America, serving both residential and commercial customers with a variety of repair and maintenance solutions.
How the Company Makes MoneyChemed Corporation generates revenue through its two main business segments: VITAS Healthcare and Roto-Rooter. VITAS Healthcare earns money primarily from Medicare and Medicaid reimbursements, as well as private insurance and private pay sources, by providing hospice care services which include medical care, pain management, and emotional support to patients and families. Revenue is largely dependent on the number of patients served and the level of care provided. Roto-Rooter contributes to Chemed's revenue by offering plumbing repair and drain cleaning services to residential and commercial clients. Income is generated from service fees and sales of related products. The company benefits from its strong brand recognition and extensive service network, which includes a mix of company-owned and independent franchise locations. Significant factors that contribute to Chemed's earnings include demographic trends such as an aging population, regulatory changes in healthcare, and economic conditions affecting consumer spending on home maintenance services.

Chemed Earnings Call Summary

Earnings Call Date:Jun 30, 2025
(Q2-2025)
|
% Change Since: -10.68%|
Next Earnings Date:Oct 29, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a mix of challenges and growth opportunities. While there are significant concerns regarding Medicare cap limitations and Roto-Rooter's revenue performance, the company remains confident about future growth and has shown resilience in hospital admissions and commercial revenue segments.
Q2-2025 Updates
Positive Updates
VITAS Revenue Increase
VITAS net revenue was $396.2 million in Q2 2025, marking a 5.8% increase compared to the prior year. This growth was driven by a 6.1% increase in days of care and a 4.2% increase in Medicare reimbursement rates.
Hospital Admissions Growth
Hospital-directed admissions increased by 9.1% in Q2 2025, reflecting a strategic focus on shorter-stay patients.
Roto-Rooter Commercial Revenue Growth
Roto-Rooter branch commercial revenue increased by 4.4% in Q2 2025, driven by growth in excavation (24.4%) and water restoration (11.7%).
Optimism for Future Growth
Despite challenges, the company remains optimistic about the long-term growth prospects for both VITAS and Roto-Rooter.
Negative Updates
Medicare Cap Limitation
VITAS faces a $19 million Medicare cap billing limitation in Florida for the 2025 cap year, influenced by weaker admissions in April and May.
Roto-Rooter Revenue Challenges
Roto-Rooter revenue growth was only 0.6% in Q2 2025, falling short of expectations, with total leads down 7.2% compared to Q2 2024.
Insurance and Compensation Costs
Higher casualty and workers' compensation costs negatively impacted Roto-Rooter's EBITDA margins by approximately 220 basis points.
Reduced Earnings Guidance
Chemed's full-year 2025 earnings per diluted share guidance was revised down to a range of $22 to $22.30 from a previous range of $24.95 to $25.45.
Company Guidance
During Chemed Corporation's second quarter 2025 earnings call, management provided guidance for the remainder of the year, detailing expected performance metrics across its VITAS and Roto-Rooter segments. VITAS is projected to see full-year 2025 revenue growth of 7.5% to 8.5% compared to the prior year, with an adjusted EBITDA margin, excluding Medicare Cap, estimated between 18.2% and 18.7%. The company anticipates $28.2 million in Medicare Cap billing limitations for 2025. Roto-Rooter's revenue is expected to increase by 1.25% to 1.75% for the year, with an adjusted EBITDA margin between 23.5% and 24.5%. Overall, Chemed's full-year earnings per diluted share are forecasted to range from $22 to $22.30, down from the previously issued guidance of $24.95 to $25.45, largely due to the challenges faced in the second quarter.

Chemed Financial Statement Overview

Summary
Chemed demonstrates strong financial health with consistent revenue growth, healthy profitability, and effective cash flow management. The low leverage and strong equity position provide financial stability, though monitoring cash reserves and debt levels is advisable.
Income Statement
85
Very Positive
Chemed's income statement shows a strong financial performance with consistent revenue growth, achieving a 3% increase in the latest TTM (Trailing-Twelve-Months) compared to the previous year. The company maintains healthy profit margins, with a TTM gross profit margin of 51.5% and a net profit margin of 12.4%. EBIT and EBITDA margins have remained stable, indicating effective cost management. However, the net profit margin shows a slight decrease from the previous year's 12.4%, suggesting some margin pressure.
Balance Sheet
78
Positive
The balance sheet reveals a solid financial position with a low debt-to-equity ratio of 0.12, indicating conservative leverage. The equity ratio is robust at 68.5%, reflecting strong shareholder equity relative to total assets. Return on equity is substantial at 26.1%, highlighting efficient use of equity. However, the decrease in cash and short-term investments and a slight increase in debt over the years may pose potential risks if not managed carefully.
Cash Flow
81
Very Positive
Chemed demonstrates strong cash flow management with a healthy operating cash flow to net income ratio of 1.18, indicating effective conversion of profits into cash. The free cash flow to net income ratio is robust at 1.02, reflecting solid free cash flow generation. While the free cash flow growth rate has seen some fluctuations, overall cash flow stability supports the company's financial flexibility and ability to invest in growth opportunities.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue2.51B2.43B2.26B2.13B2.14B2.08B
Gross Profit812.94M854.35M796.55M765.09M769.80M701.39M
EBITDA419.29M464.29M414.34M393.44M411.23M454.93M
Net Income290.35M302.00M272.51M249.62M268.55M319.47M
Balance Sheet
Total Assets1.72B1.67B1.67B1.44B1.34B1.43B
Cash, Cash Equivalents and Short-Term Investments249.90M178.35M263.96M74.13M32.90M162.68M
Total Debt145.56M140.84M155.11M247.01M323.54M135.41M
Total Liabilities519.36M549.58M560.22M643.30M719.45M533.71M
Stockholders Equity1.20B1.12B1.11B798.72M623.27M901.20M
Cash Flow
Free Cash Flow371.39M367.97M273.44M252.56M249.92M430.46M
Operating Cash Flow426.78M417.50M330.30M309.89M308.60M489.29M
Investing Cash Flow-60.19M-143.91M-60.64M-59.40M-57.76M-61.56M
Financing Cash Flow-339.59M-359.19M-79.83M-209.25M-380.62M-271.21M

Chemed Technical Analysis

Technical Analysis Sentiment
Negative
Last Price434.91
Price Trends
50DMA
499.96
Negative
100DMA
542.06
Negative
200DMA
549.47
Negative
Market Momentum
MACD
-20.08
Negative
RSI
37.59
Neutral
STOCH
34.10
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 434.91 is below the 20-day moving average (MA) of 446.97, below the 50-day MA of 499.96, and below the 200-day MA of 549.47, indicating a bearish trend. The MACD of -20.08 indicates Negative momentum. The RSI at 37.59 is Neutral, neither overbought nor oversold. The STOCH value of 34.10 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

Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$9.12B28.5517.57%0.16%17.71%41.83%
76
Outperform
$4.53B22.2315.25%17.06%5.03%
73
Outperform
$11.74B22.7725.35%0.58%11.80%30.12%
73
Outperform
$3.27B39.287.26%4.92%-7.34%
71
Outperform
$1.48B11.208.15%2.15%-16.10%-48.97%
62
Neutral
$6.34B22.3824.14%0.46%7.55%-1.52%
51
Neutral
$7.38B-0.04-62.85%2.34%15.18%-2.87%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
CHE
Chemed
435.33
-136.84
-23.92%
AMED
Amedisys
100.94
2.94
3.00%
OPCH
Option Care Health
28.20
-2.34
-7.66%
EHC
Encompass Health
117.58
31.30
36.28%
SEM
Select Medical
12.07
-5.28
-30.43%
ENSG
The Ensign Group
160.63
20.85
14.92%

Chemed Corporate Events

Financial Disclosures
Chemed Lowers Earnings Guidance for 2025
Negative
Jun 27, 2025

On June 27, 2025, Chemed Corporation announced that it expects lower earnings for the second quarter and has reduced its full-year guidance for 2025. This announcement may impact the company’s operations and industry positioning, potentially affecting stakeholders’ expectations and market confidence.

The most recent analyst rating on (CHE) stock is a Buy with a $708.00 price target. To see the full list of analyst forecasts on Chemed stock, see the CHE Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Chemed Holds Annual Stockholders Meeting on Key Decisions
Neutral
May 20, 2025

On May 19, 2025, Chemed Corporation held its annual meeting of stockholders where several key decisions were made. The entire Board of Directors was elected, the 2025 Stock Incentive Plan was approved, and PricewaterhouseCoopers LLP was ratified as the company’s independent accountants for the year ending December 31, 2024. Additionally, the executive compensation program was approved on a non-binding basis. A proposal to reduce the stockholder threshold for calling a special meeting was not presented due to the absence of the proponent or a representative.

The most recent analyst rating on (CHE) stock is a Buy with a $708.00 price target. To see the full list of analyst forecasts on Chemed stock, see the CHE Stock Forecast page.

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.Date of analysis: Aug 01, 2025