Chemed (CHE) AI Stock Analysis

• Market Cap: $6.28B
• Dividend Yield: 0.49%
• Average Volume (3M): 201.48K
• Price to Earnings (P/E): 22.8
• Beta (1Y): 0.32
• Revenue Growth: 6.45%
• EPS Growth: -4.77%
• Country: US
• Employees: 15,695
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Care Facilities
• EPS (TTM): 5.27
• Shares Outstanding: 14,571,695
• 10 Day Avg. Volume: 220,043
• 30 Day Avg. Volume: 201,479
• PEG Ratio: 2.40
• Price to Book (P/B): 7.11
• Price to Sales (P/S): 3.27
• P/FCF Ratio: 21.63
• Enterprise Value/Market Cap: 1.03
• Enterprise Value/Revenue: 2.55
• Enterprise Value/Gross Profit: 7.92
• Enterprise Value/Ebitda: 14.81
• 1Y Price Target: $575.00
• Price Target Upside: 33.32% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

• Rating: 68 Neutral
• Price Target: $470.00 ▲(8.97% 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 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 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 Money

Chemed 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 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.

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.

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.

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	436.53M	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

• Technical Analysis Sentiment: Negative
• Last Price: 431.30
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: 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 431.3 is below the 20-day moving average (MA) of 438.33, below the 50-day MA of 447.74, and below the 200-day MA of 517.80, indicating a bearish trend. The MACD of -0.45 indicates Negative momentum. The RSI at 43.71 is Neutral, neither overbought nor oversold. The STOCH value of 42.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CHE.

Chemed Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ADUS	―	$2.17B	26.01	8.54%	―	14.29%	7.85%
ENSG	―	$10.40B	32.98	17.57%	0.14%	17.71%	41.83%
NHC	―	$1.85B	17.81	10.65%	2.09%	25.19%	13.44%
OPCH	―	$4.25B	20.88	15.02%	―	17.06%	5.03%
CHE	―	$6.28B	22.80	24.11%	0.49%	6.45%	-4.77%
DVA	―	$8.40B	12.26	―	―	5.14%	4.37%
Sector *	―	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Chemed Corporate Events

Chemed Reports Mixed Q3 2025 Earnings Performance

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

Chemed’s Recent Earnings Call: A Mixed Bag of Growth and Challenges