Chemed (CHE) AI Stock Analysis

• Market Cap: $6.42B
• Dividend Yield: 0.48%
• Average Volume (3M): 197.38K
• Price to Earnings (P/E): 22.7
• Beta (1Y): 0.22
• Revenue Growth: 7.55%
• EPS Growth: -1.52%
• Country: US
• Employees: 15,695
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Care Facilities
• EPS (TTM): 4.27
• Shares Outstanding: 14,571,695
• 10 Day Avg. Volume: 208,503
• 30 Day Avg. Volume: 197,380
• 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: 1.10
• Enterprise Value/Revenue: 2.81
• Enterprise Value/Gross Profit: 8.68
• Enterprise Value/Ebitda: 16.18
• 1Y Price Target: $578.50
• Price Target Upside: 30.87% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 71 Outperform
• Price Target: $511.00 ▲(15.60% Upside)

Chemed's overall stock score reflects strong financial performance as the most significant factor, supported by stable technical indicators. However, the high valuation and mixed earnings call sentiment, including reduced earnings guidance, present notable risks. The absence of impactful corporate events further emphasizes the importance of financial and technical factors in the overall assessment.

Positive Factors

Revenue Growth

VITAS's revenue growth indicates strong demand for hospice services and effective reimbursement strategies, supporting long-term business expansion.

Cash Flow Management

Efficient cash flow management ensures Chemed can fund operations and growth initiatives, enhancing financial stability and resilience.

Balance Sheet Health

A low debt-to-equity ratio reflects conservative leverage, providing Chemed with financial flexibility to navigate economic fluctuations.

Negative Factors

Earnings Guidance Reduction

Reduced earnings guidance suggests potential challenges in meeting financial targets, impacting investor confidence and long-term growth expectations.

Margin Compression

Significant margin compression in Roto-Rooter indicates operational challenges, potentially affecting profitability and competitive positioning.

Medicare Cap Limitations

Medicare cap limitations in Florida could restrict revenue growth in a key market, impacting VITAS's ability to scale and maintain profitability.

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 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.

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.

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.

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

• Technical Analysis Sentiment: Negative
• Last Price: 442.04
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• 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 442.04 is below the 20-day moving average (MA) of 453.35, below the 50-day MA of 449.09, and below the 200-day MA of 527.07, indicating a bearish trend. The MACD of -2.15 indicates Positive momentum. The RSI at 42.90 is Neutral, neither overbought nor oversold. The STOCH value of 23.62 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
ENSG	76 Outperform	$10.07B	31.49	16.00%	0.14%	17.71%	41.83%
ADUS	76 Outperform	$2.13B	25.46	7.58%	―	14.29%	7.85%
CHE	71 Outperform	$6.42B	22.65	24.14%	0.48%	7.55%	-1.52%
NHC	69 Neutral	$1.89B	18.58	10.26%	2.05%	25.19%	13.44%
OPCH	68 Neutral	$4.42B	22.18	15.53%	―	17.06%	5.03%
DVA	61 Neutral	$9.50B	12.98	-226.24%	―	5.09%	7.85%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%