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Chemed Corporation (CHE)
NYSE:CHE
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Chemed
(NYSE:CHE)
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Rating:68Neutral
Price Target:
$493.00
▲(9.01% Upside)
Chemed's overall stock score is driven by its strong financial performance, which is the most significant factor. However, technical indicators and valuation suggest moderate caution, while the earnings call highlights some challenges that could impact future performance.
Positive Factors
Revenue Growth
VITAS's revenue growth indicates strong demand for hospice services, supporting long-term business sustainability and market position.
Cash Flow Management
Efficient cash flow management ensures Chemed can fund operations and growth initiatives, enhancing financial stability over time.
Balance Sheet Health
A strong balance sheet with low leverage provides Chemed with financial flexibility and resilience against economic fluctuations.
Negative Factors
Medicare Cap Billing Limitation
Medicare cap limitations in Florida could restrict revenue growth, impacting Chemed's profitability and operational flexibility.
Roto-Rooter Revenue Challenges
Stagnant revenue growth and declining leads in Roto-Rooter may indicate market saturation or competitive pressures, affecting future growth.
Earnings Guidance Reduction
Reduced earnings guidance reflects potential operational challenges and market uncertainties, impacting investor confidence and valuation.
Chemed (CHE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.66B
Dividend Yield0.46%
Average Volume (3M)180.42K
Price to Earnings (P/E)23.5
Beta (1Y)0.21
Revenue Growth7.55%
EPS Growth-1.52%
CountryUS
Employees15,695
SectorHealthcare
Sector Strength45
IndustryMedical - Care Facilities
Share Statistics
EPS (TTM)4.27
Shares Outstanding14,571,695
10 Day Avg. Volume199,588
30 Day Avg. Volume180,418
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/Revenue2.81
Enterprise Value/Gross Profit8.68
Enterprise Value/Ebitda16.18
Forecast
1Y Price Target
$578.50Price Target Upside27.92% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
Chemed Business Overview & Revenue Model
Company DescriptionChemed 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 segments, VITAS and Roto-Rooter. It offers plumbing, drain cleaning, excavation, water restoration, and other related services to residential and commercial customers through company-owned branches, independent contractors, and franchisees. The company was incorporated in 1970 and is headquartered in Cincinnati, Ohio.
How the Company Makes MoneyChemed generates revenue primarily through its VITAS Healthcare segment, which earns money by providing hospice services reimbursed by Medicare, Medicaid, and private insurers. The company receives payment based on a per diem rate for each patient, which varies according to the level of care required. In addition to hospice care, Chemed's Roto-Rooter segment contributes to revenue through plumbing and drain cleaning services, charging customers on a fee-for-service basis. Significant partnerships with healthcare providers and participation in healthcare reimbursement programs further enhance Chemed's revenue streams, enabling it to maintain a steady influx of patients and contracts.
Chemed Earnings Call Summary
Earnings Call Date:Jun 30, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 29, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of positive developments and challenges. While VITAS showed some growth in admissions and revenue, the Florida Medicare cap issue and Roto-Rooter's revenue struggles, along with the reduced earnings guidance, highlight significant challenges. The overall sentiment of the call reflects balanced highlights and lowlights.Q2-2025 Updates
Positive Updates
VITAS Admissions Increase
Admissions at VITAS increased by 4.9% in the second quarter of 2025 compared to the same period in 2024, excluding transfers from the previous year acquisition.
VITAS Revenue Growth
VITAS net revenue increased by 5.8% to $396.2 million in the second quarter of 2025, driven by a 6.1% increase in days of care and a 4.2% increase in Medicare reimbursement rates.
Roto-Rooter Commercial Revenue Increase
Roto-Rooter branch commercial revenue increased by 4.4% in the second quarter of 2025, driven by a 24.4% increase in excavation and an 11.7% increase in water restoration.
Negative Updates
Florida Medicare Cap Billing Limitation
The Florida program is projected to end the 2025 Medicare cap year with a $19 million billing limitation due to weaker admissions in April and May.
Roto-Rooter Revenue and Leads Decline
Roto-Rooter revenue increased only 0.6% and total leads were down 7.2% in the second quarter of 2025 compared to the same period in 2024.
Adjusted Earnings Per Share Guidance Reduction
Chemed revised its full-year 2025 earnings guidance to $22.00-$22.30 per share, down from the previously issued guidance of $24.95-$25.45.
Roto-Rooter Adjusted EBITDA Decline
Roto-Rooter's adjusted EBITDA decreased by 18.7% compared to the prior year quarter, with a margin decline of 517 basis points.
Company Guidance
During the Chemed Corporation's Second Quarter 2025 Earnings Conference Call, the company provided detailed guidance on its financial outlook for the remainder of the year. VITAS is expected to see a full-year 2025 revenue increase of 7.5% to 8.5% compared to 2024, with an adjusted EBITDA margin projected to be between 18.2% and 18.7%. The company anticipates $28.2 million in Medicare Cap billing limitations for 2025, with $19 million attributed to the Florida combined program. Roto-Rooter's revenue is forecasted to grow by 1.25% to 1.75% in 2025, with an adjusted EBITDA margin expected to be between 23.5% and 24.5%. The full-year 2025 earnings per diluted share are estimated to be in the range of $22 to $22.30, assuming an effective tax rate of 25.3% and a diluted share count of 14.7 million shares. Chemed's previously issued 2025 guidance was $24.95 to $25.45 per diluted share, compared to the reported adjusted earnings per diluted share of $23.13 in 2024.Chemed Financial Statement Overview
Summary
Chemed demonstrates strong financial performance with robust revenue growth, solid profit margins, and efficient cash flow management. The company maintains a conservative leverage profile, enhancing financial stability. However, slight margin compression and increasing capital expenditures are potential concerns.Income Statement
Chemed shows strong revenue growth with a 10.94% increase in TTM (Trailing-Twelve-Months). Gross profit margin is solid at 32.36%, and net profit margin is healthy at 11.56%. The EBITDA margin is robust at 16.69%, indicating efficient operations. However, there is a slight compression in gross profit margins compared to previous years, which could be a concern if the trend continues.85
Very Positive
Balance Sheet
The balance sheet is stable with a low debt-to-equity ratio of 0.12, indicating conservative leverage. The equity ratio stands at 69.76%, showing strong equity financing. Return on equity is impressive at 24.23%, reflecting effective utilization of equity. The company has improved its financial position with increasing stockholders' equity and decreasing liabilities.78
Positive
Cash Flow
Cash flow generation is strong with a 1.32% growth in free cash flow. Operating cash flow to net income ratio is at 1.47, highlighting efficient cash conversion. Free cash flow supports net income well, but capital expenditures have been slightly increasing, which could affect future free cash flow if growth in operating cash flows does not keep pace.80
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.51B | 2.43B | 2.26B | 2.13B | 2.14B | 2.08B |
| Gross Profit | 812.94M | 854.35M | 796.55M | 765.09M | 769.80M | 701.39M |
| EBITDA | 436.18M | 464.29M | 414.34M | 393.44M | 411.23M | 454.93M |
| Net Income | 290.35M | 302.00M | 272.51M | 249.62M | 268.55M | 319.47M |
Balance Sheet | ||||||
| Total Assets | 1.72B | 1.67B | 1.67B | 1.44B | 1.34B | 1.43B |
| Cash, Cash Equivalents and Short-Term Investments | 249.90M | 178.35M | 263.96M | 74.13M | 32.90M | 162.68M |
| Total Debt | 145.56M | 140.84M | 155.11M | 247.01M | 323.54M | 135.41M |
| Total Liabilities | 519.36M | 549.58M | 560.22M | 643.30M | 719.45M | 533.71M |
| Stockholders Equity | 1.20B | 1.12B | 1.11B | 798.72M | 623.27M | 901.20M |
Cash Flow | ||||||
| Free Cash Flow | 371.39M | 367.97M | 273.44M | 252.56M | 249.92M | 430.46M |
| Operating Cash Flow | 426.78M | 417.50M | 330.30M | 309.89M | 308.60M | 489.29M |
| 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
Negative
452.25
Price Trends
449.99
Positive
499.54
Negative
531.72
Negative
Market Momentum
-0.44
Positive
48.48
Neutral
54.48
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 452.25 is below the 20-day moving average (MA) of 455.74, above the 50-day MA of 449.99, and below the 200-day MA of 531.72, indicating a neutral trend. The MACD of -0.44 indicates Positive momentum. The RSI at 48.48 is Neutral, neither overbought nor oversold. The STOCH value of 54.48 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 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
Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | 9.48B | 30.16 | 16.00% | 0.15% | 17.71% | 41.83% | |
76 Outperform | 2.06B | 24.68 | 7.58% | ― | 14.29% | 7.85% | |
70 Outperform | 4.59B | 22.56 | 15.53% | ― | 17.06% | 5.03% | |
69 Neutral | 1.82B | 17.75 | 10.26% | 2.11% | 25.19% | 13.44% | |
68 Neutral | $6.66B | 23.51 | 24.14% | 0.46% | 7.55% | -1.52% | |
61 Neutral | 9.31B | 12.79 | -226.24% | ― | 5.09% | 7.85% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
Performance Comparison
CHE
Chemed
452.25
-134.64
-22.94%
ADUS
Addus Homecare
111.90
-20.94
-15.76%
OPCH
Option Care Health
28.31
-3.48
-10.95%
DVA
DaVita
130.16
-31.42
-19.45%
NHC
National Healthcare
117.22
-6.89
-5.55%
ENSG
The Ensign Group
164.29
12.83
8.47%
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.