Chemed Corporation (CHE) | Investment Case

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.

Show Full description

1.b. Last Insights on CHE

Breaking News: Chemed Corporation reported its Q4 2025 earnings on February 26 2026. The company's executive officers are under investigation by Johnson Fistel PLLP for potential claims on behalf of investors. The investigation focuses on whether investor losses can be recovered under federal securities laws. No analyst recommendation is available based on the recent earnings release. However some analyst previously recommended a hold on the stock. Chemed Corporation's Q4 2025 earnings call transcript is available. Johnson Fistel encourages shareholders to reach out for more information on recovering potential losses.

1.c. Company Highlights

Last Price	424.16
Change Percentage	0.65%
Open	415.08
Previous Close	421.4
Market Cap ( Millions)	5984
Volume	270757
Year High	623.61
Year Low	385
M A 50	444.62
M A 200	463.3

FCF Yield	5.44%
Dividend Yield	0.54%
ROE	23.92%
Debt / Equity	15.80%
Net Debt / EBIDTA	18.93%
Price To Book	6.06
Price Earnings Ratio	22.38
Price To FCF	18.39
Price To sales	2.37
EV / EBITDA	14.31

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

CHE Stock Falls Post Q4 Earnings & Revenue Miss, Margins Crash

Feb -27

Source: zacks.com

Chemtrade Logistics Income Fund (CHE.UN:CA) Q4 2025 Earnings Call Transcript

Feb -27

Source: seekingalpha.com

Chemed Corporation Shareholders Are Encouraged to Reach Out to Johnson Fistel for More Information About Potentially Recovering Their Losses

Feb -26

Source: globenewswire.com

Chemed Corporation (CHE) Q4 2025 Earnings Call Transcript

Feb -26

Source: seekingalpha.com

Chemed Reports Fourth-Quarter 2025 Results

Feb -25

Source: globenewswire.com

Chemed Stock Down 15% in a Year as One Fund Builds a $5.56 Million Stake

Feb -16

Source: fool.com

Chemed Corporation Board of Directors Authorizes an Additional $300 Million for Stock Repurchase and Declares Quarterly Dividend of 60 Cents

Feb -13

Source: globenewswire.com

Keybank National Association OH Cuts Stake in Chemed Corporation $CHE

Feb -08

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

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

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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 ->

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 ->

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 ->

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 ->

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 ->

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 ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-1.84%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

5.95%

Chemed Corporation - US16359R1032

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on CHE

1.c. Company Highlights

Less Volatile

Better Quality

Expensive

Earnings Miss

Revenues Miss

Earnings Beats

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

Segment Performance

Guidance and Outlook

Valuation

3. NewsRoom

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%

Roto-Rooter

Expected Growth: 4.83%

7. Detailed Products

VITAS Healthcare

Roto-Rooter Plumbing and Water Cleanup

8. Chemed Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

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

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

424.16$

Current Price

424.16$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA