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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on CHE

Chemed Corporation's recent performance was negatively impacted by its Q4 2025 earnings and revenue miss, with margins contracting significantly. The company's 2026 EPS outlook also fell short of consensus. Investor confidence was further eroded by Harbor Capital Advisors and Keybank National Association reducing their stakes in the company. Additionally, Johnson Fistel is investigating potential claims on behalf of investors, focusing on Chemed's executive officers and potential recovery of losses under federal securities laws. A $300 million stock repurchase authorization was announced, which could have a positive effect.

1.c. Company Highlights

2. Chemed Corporation's Q4 2025 Earnings: A Mixed Bag

Chemed Corporation reported a mixed set of results for the fourth quarter of 2025, with VITAS' admissions rising 6% year-over-year to 17,419, but revenue growth and EBITDA margin being muted due to a higher-than-expected percentage of hospital-based admissions. The company's EPS came in at $6.42, missing analyst estimates of $7.02. Revenue for Roto-Rooter declined 3.7% in the fourth quarter, although branch commercial revenue increased 1.6%. The company's EBITDA margin prior to Medicare Cap is expected to be 17.5% to 18% in 2026, with revenue growth forecasted to be 5.5% to 6.5%.

Publication Date: Feb -27

📋 Highlights
  • VITAS Admissions Growth: 17,419 admissions (+6%) Q4 2025 vs. Q4 2024, but revenue growth muted due to skewed hospital admissions.
  • 2026 Revenue and Margin Guidance: VITAS projects 5.5–6.5% revenue growth and 17.5–18% EBITDA margin; Roto-Rooter forecasts 3–3.5% revenue growth with 22.5–23% EBITDA margin.
  • Roto-Rooter Q4 Performance: Revenue declined 3.7% YoY, but commercial revenue rose 1.6%, signaling growth potential in non-residential markets.
  • 2026 Earnings Weighting: 55% of consolidated adjusted net income and EBITDA expected in H2 2026, driven by improved lead volume and collections.
  • Medicare Cap Liability: VITAS anticipates $9.5M cap limit in 2026, primarily impacted by California, with strategies to mitigate billing limitations in other states.

Segment Performance

VITAS has been granted a certificate of need to operate in Manatee County, Florida, representing a significant growth opportunity. The company expects to rebalance its patient mix in 2026, driving revenue growth and EBITDA margin expansion. Roto-Rooter management believes that the commercial business continues to represent a significant opportunity for growth, with branch commercial revenue increasing 1.6% in the fourth quarter. As Kevin McNamara noted, "We've moved from a business model where leads were predominantly free to one where we pay for them. The leads are still profitable, but the change in business model affects the comparison."

Guidance and Outlook

Chemed Corporation's 2026 guidance includes revenue growth of 5.5% to 6.5% for VITAS and 3% to 3.5% for Roto-Rooter. The company expects its EBITDA margin prior to Medicare Cap to be 17.5% to 18% and Roto-Rooter's adjusted EBITDA margin to be 22.5% to 23%. The earnings trajectory is weighted towards the second half of 2026, with 55% of consolidated adjusted net income and consolidated adjusted EBITDA prior to Medicare Cap projected to be generated in the second half.

Valuation

Chemed Corporation's current valuation metrics indicate a P/E Ratio of 20.93, EV/EBITDA of 14.54, and ROE of 23.92%. With analysts estimating revenue growth of 4.7% for next year, the stock appears to be fairly valued. The company's strong cash flow generation, as evidenced by its Free Cash Flow Yield of 5.63%, is a positive. However, the recent miss on EPS and the challenges faced by Roto-Rooter may impact the stock's near-term performance.

3. NewsRoom

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New Strong Sell Stocks for April 15th

Apr -15

Source: zacks.com

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Chemed Corporation Announces a Five-Year $450 Million Amended and Restated Credit Agreement

Apr -13

Source: globenewswire.com

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Allspring Global Investments Holdings LLC Boosts Stake in Chemed Corporation $CHE

Apr -03

Source: defenseworld.net

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Chemed To Report First Quarter 2026 Earnings April 23, Related Conference Call To Be Held On April 24

Apr -01

Source: globenewswire.com

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Roto-Rooter Completes Acquisitions for Two Significant Territories

Apr -01

Source: globenewswire.com

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Chemed Corporation $CHE Shares Acquired by SG Americas Securities LLC

Mar -30

Source: defenseworld.net

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Brokerages Set Chemed Corporation (NYSE:CHE) Price Target at $498.00

Mar -30

Source: defenseworld.net

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Chemed (NYSE:CHE) vs. LifeStance Health Group (NASDAQ:LFST) Financial Comparison

Mar -28

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.89%)

6. Segments

VITAS

Expected Growth: 8.37%

VITAS' 8.37% growth is driven by increasing demand for hospice care services, expansion into new markets, and strategic acquisitions. Additionally, the company's focus on providing high-quality patient care and improving operational efficiencies have contributed to its growth. Furthermore, the aging population and the shift towards value-based care have created a favorable environment for VITAS' services.

Roto-Rooter

Expected Growth: 4.83%

Roto-Rooter's 4.83% growth is driven by increasing demand for residential and commercial plumbing services, expansion into new markets, and strategic acquisitions. Additionally, the company's focus on water conservation and eco-friendly solutions resonates with environmentally conscious consumers, contributing to its growth momentum.

7. Detailed Products

VITAS Healthcare

VITAS Healthcare is a hospice care provider that offers end-of-life care to patients with terminal illnesses.

Roto-Rooter Plumbing and Water Cleanup

Roto-Rooter is a plumbing and water cleanup service provider that offers emergency plumbing, drain cleaning, and water damage restoration services.

8. Chemed Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Chemed Corporation's threat of substitutes is moderate due to the presence of alternative healthcare services and products. However, the company's diversified business model and strong brand recognition mitigate this threat.

Bargaining Power Of Customers

Chemed Corporation's customers have limited bargaining power due to the company's strong market position and diversified customer base. This reduces the risk of customers negotiating lower prices or demanding better services.

Bargaining Power Of Suppliers

Chemed Corporation's suppliers have moderate bargaining power due to the company's dependence on a few key suppliers. However, the company's strong relationships with suppliers and its diversified supply chain mitigate this risk.

Threat Of New Entrants

The threat of new entrants in Chemed Corporation's industry is low due to the high barriers to entry, including regulatory hurdles and significant capital requirements. This reduces the risk of new competitors entering the market.

Intensity Of Rivalry

The intensity of rivalry in Chemed Corporation's industry is high due to the presence of established competitors and the need to maintain market share. The company must continue to innovate and differentiate its services to remain competitive.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 12.28%
Debt Cost 3.95%
Equity Weight 87.72%
Equity Cost 6.23%
WACC 5.95%
Leverage 14.00%

11. Quality Control: Chemed Corporation passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Encompass Health

A-Score: 6.1/10

Value: 6.0

Growth: 5.1

Quality: 7.0

Yield: 2.0

Momentum: 8.0

Volatility: 8.7

1-Year Total Return ->

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Ensign Group

A-Score: 5.5/10

Value: 2.6

Growth: 7.4

Quality: 4.7

Yield: 0.0

Momentum: 9.0

Volatility: 9.0

1-Year Total Return ->

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Option Care Health

A-Score: 5.4/10

Value: 4.0

Growth: 7.2

Quality: 6.8

Yield: 0.0

Momentum: 8.0

Volatility: 6.7

1-Year Total Return ->

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DaVita

A-Score: 4.8/10

Value: 8.0

Growth: 7.0

Quality: 4.7

Yield: 0.0

Momentum: 2.0

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
Chemed

A-Score: 4.5/10

Value: 3.5

Growth: 6.0

Quality: 7.3

Yield: 0.0

Momentum: 2.0

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
Select Medical

A-Score: 4.4/10

Value: 7.7

Growth: 4.3

Quality: 4.0

Yield: 4.0

Momentum: 1.0

Volatility: 5.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

382.88$

Current Price

382.88$

Potential

-0.00%

Expected Cash-Flows