Education
About Us
Working with TipRanks
Follow Us
Chemed Corporation (CHE)
NYSE:CHE
Top Page
Chemed
(NYSE:CHE)
73Outperform
Positive Factors
Market Demand
Google searches for 'plumbing' in Q1 2025 jumped 16% quarter-over-quarter, indicating strong demand for Roto-Rooter services.
Pricing Strategy
Roto has the ability to push higher prices to consumers while most of its services are need-based, providing a potential advantage.
Revenue Growth
Roto revenues came in much better and grew year over year, which is a welcome sign given the declines last year.
Negative Factors
Medicare Cap Challenge
Given the increase in the Medicare cap is below the overall Medicare rate increase for Vitas, Vitas would be over the cap in some of its markets.
Vitas Performance
Vitas Q4 revenues were 3% below estimate and 1% below consensus due to worse margins from hurricanes and lower acuity headwind.
Chemed (CHE) vs. S&P 500 (SPY)
Market Cap
$8.43B
Dividend Yield0.33%
Average Volume (3M)138.18K
Price to Earnings (P/E)28.1
Beta (1Y)0.18
Revenue Growth8.52%
EPS Growth10.36%
CountryUS
Employees15,695
SectorHealthcare
Sector Strength53
IndustryMedical - Care Facilities
Share Statistics
EPS (TTM)5.63
Shares Outstanding14,629,484
10 Day Avg. Volume149,448
30 Day Avg. Volume138,177
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.07
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit10.60
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$677.33Price Target Upside17.30% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
Chemed Business Overview & Revenue Model
Company DescriptionChemed Corporation (CHE) is a diversified public company headquartered in Cincinnati, Ohio, operating in the healthcare and service sectors. Chemed's primary business segments include VITAS Healthcare, which provides hospice care services, and Roto-Rooter, a widely recognized name in plumbing and drain cleaning services. VITAS Healthcare offers end-of-life care to patients with terminal illnesses, focusing on enhancing the quality of life. Meanwhile, Roto-Rooter provides residential and commercial plumbing repair and maintenance services across the United States and Canada.
How the Company Makes MoneyChemed Corporation generates revenue through its two main business segments: VITAS Healthcare and Roto-Rooter. VITAS Healthcare earns money by providing hospice care services, which are typically reimbursed by Medicare, Medicaid, and private insurance. The revenue model involves offering comprehensive end-of-life care, which includes medical support, palliative care, and bereavement services to terminally ill patients, often resulting in predictable cash flows due to the nature of insurance reimbursement. Roto-Rooter, on the other hand, generates income by providing a wide range of plumbing and drain cleaning services to both residential and commercial clients. This segment charges fees for service calls, repairs, maintenance, and installation, contributing to its revenue stream. The company's earnings are further supported by its strong brand recognition, extensive service network, and strategic acquisition of complementary businesses to expand its market reach.
Chemed Financial Statement Overview
Summary
Chemed exhibits strong financial health characterized by consistent revenue growth, healthy profitability, and effective cash flow management. The company's low leverage and strong equity position provide financial stability, although careful monitoring of cash reserves and debt levels is advisable. Chemed remains well-positioned within the Medical - Care Facilities industry, with solid prospects for continued growth and stability.Income Statement
Chemed's income statement shows a strong financial performance with consistent revenue growth, achieving a 3% increase in the latest TTM (Trailing-Twelve-Months) compared to the previous year. The company maintains healthy profit margins, with a TTM gross profit margin of 51.5% and a net profit margin of 12.4%. EBIT and EBITDA margins have remained stable, indicating effective cost management. However, the net profit margin shows a slight decrease from the previous year's 12.4%, suggesting some margin pressure.85
Very Positive
Balance Sheet
The balance sheet reveals a solid financial position with a low debt-to-equity ratio of 0.12, indicating conservative leverage. The equity ratio is robust at 68.5%, reflecting strong shareholder equity relative to total assets. Return on equity is substantial at 26.1%, highlighting efficient use of equity. However, the decrease in cash and short-term investments and a slight increase in debt over the years may pose potential risks if not managed carefully.78
Positive
Cash Flow
Chemed demonstrates strong cash flow management with a healthy operating cash flow to net income ratio of 1.18, indicating effective conversion of profits into cash. The free cash flow to net income ratio is robust at 1.02, reflecting solid free cash flow generation. While the free cash flow growth rate has seen some fluctuations, overall cash flow stability supports the company's financial flexibility and ability to invest in growth opportunities.81
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.43B | 2.26B | 2.13B | 2.14B | 2.08B | Gross Profit |
| 854.35M | 796.55M | 765.09M | 769.80M | 701.39M | EBIT |
| 366.49M | 340.57M | 343.50M | 343.04M | 389.68M | EBITDA |
| 464.29M | 414.34M | 393.44M | 411.23M | 454.93M | Net Income Common Stockholders |
| 302.00M | 272.51M | 249.62M | 268.55M | 319.47M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 178.35M | 263.96M | 74.13M | 32.90M | 162.68M | Total Assets |
| 1.67B | 1.67B | 1.44B | 1.34B | 1.43B | Total Debt |
| 140.84M | 155.11M | 247.01M | 323.54M | 135.41M | Net Debt |
| -37.51M | -108.85M | 172.88M | 290.65M | -27.27M | Total Liabilities |
| 549.58M | 560.22M | 643.30M | 719.45M | 533.71M | Stockholders Equity |
| 1.12B | 1.11B | 798.72M | 623.27M | 901.20M |
| Cash Flow | Free Cash Flow | |||
| 367.97M | 273.44M | 252.56M | 249.92M | 430.46M | Operating Cash Flow |
| 417.50M | 330.30M | 309.89M | 308.60M | 489.29M | Investing Cash Flow |
| -143.91M | -60.64M | -59.40M | -57.76M | -61.56M | Financing Cash Flow |
| -359.19M | -79.83M | -209.25M | -380.62M | -271.21M |
Chemed Technical Analysis
Positive
577.44
Price Trends
589.91
Negative
566.50
Positive
569.75
Positive
Market Momentum
-4.12
Negative
48.59
Neutral
80.06
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CHE, the sentiment is Positive. The current price of 577.44 is below the 20-day moving average (MA) of 577.85, below the 50-day MA of 589.91, and above the 200-day MA of 569.75, indicating a neutral trend. The MACD of -4.12 indicates Negative momentum. The RSI at 48.59 is Neutral, neither overbought nor oversold. The STOCH value of 80.06 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CHE.
Chemed Risk Analysis
Chemed disclosed 25 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 (52)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $7.68B | 24.76 | 17.66% | 0.18% | 16.80% | 39.99% | |
76 Outperform | $5.40B | 26.21 | 15.38% | ― | 16.98% | -17.76% | |
73 Outperform | $8.43B | 28.06 | 26.11% | 0.33% | 8.52% | 10.36% | |
68 Neutral | $3.15B | 35.57 | 7.85% | ― | 5.34% | ― | |
68 Neutral | $11.80B | 24.01 | 25.33% | 0.56% | 11.21% | 30.38% | |
64 Neutral | $1.86B | 10.99 | 10.38% | 3.03% | -8.86% | -36.22% | |
52 Neutral | $5.23B | 3.70 | -41.86% | 2.84% | 16.58% | -0.16% |
* Healthcare Sector Average
Performance Comparison
CHE
Chemed
577.44
5.27
0.92%
AMED
Amedisys
96.14
1.59
1.68%
OPCH
Option Care Health
33.44
3.16
10.44%
EHC
Encompass Health
117.48
31.72
36.99%
SEM
Select Medical
15.02
-2.62
-14.85%
ENSG
The Ensign Group
136.94
19.46
16.56%
Chemed Earnings Call Summary
Earnings Call Date:Apr 23, 2025
(Q1-2025)
| % Change Since: -1.37%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook with strong growth in VITAS admissions and revenue, supported by strategic acquisitions such as Covington Health. However, Roto Rooter faced challenges with declining EBITDA and contractor revenue, alongside the need to carefully manage Medicare cap constraints. While there are positive growth indicators, particularly for VITAS, Roto Rooter's performance and cap management issues present notable hurdles.Q1-2025 Updates
Positive Updates
Strong Growth in VITAS Admissions
VITAS admissions totaled 18,139 in the first quarter of 2025, a 7.3% improvement compared to the same period in 2024. The average daily census expanded by 13.1% to 22,244.
VITAS Revenue and EBITDA Increase
VITAS net revenue was $407.4 million in Q1 2025, a 15.1% increase from the prior year. Adjusted EBITDA, excluding Medicare cap, grew by 15.9% to $70.3 million.
Acquisition of Covington Health Boosts Performance
The Covington Health acquisition, completed on April 17, 2024, positively impacted revenue, adjusted net income, and EBITDA by 3-4%.
Roto Rooter Commercial Revenue Growth
Roto Rooter branch commercial revenue increased by 7.3% in Q1 2025, driven by a 38% rise in excavation and a 14% increase in water restoration.
Negative Updates
Decline in Roto Rooter's Overall EBITDA
Roto Rooter's adjusted EBITDA decreased by 2.4% compared to the prior year quarter, with a margin decline of 108 basis points.
Reduction in Revenue from Independent Contractors
Revenue from Roto Rooter's independent contractors declined by 6.4% in Q1 2025 compared to the same period in 2024.
Challenges with Medicare Cap Management
The focus on hospital-based admissions, which come later in the disease trajectory, limits revenue and EBITDA margin growth but provides needed Medicare cap cushion.
Company Guidance
During Chemed Corporation's First Quarter 2025 Earnings Conference Call, the company provided a comprehensive overview of its financial performance and strategic initiatives. Key metrics included VITAS admissions totaling 18,139, an increase of 7.3% from the previous year, and an average daily census (ADC) of 22,244, up 13.1% year-over-year. VITAS net revenue rose by 15.1% to $407.4 million, with adjusted EBITDA growing 15.9% to $70.3 million. The acquisition of Covington Health contributed positively to revenue and EBITDA by 3-4%. Roto Rooter reported a 1.8% revenue increase, with branch residential and commercial revenues rising by 1.7% and 7.3%, respectively. Despite a 6.4% decline in revenue from independent contractors, Roto Rooter's adjusted EBITDA margin stood at 24.7%. The call highlighted strategic efforts to manage the Medicare cap and expand operations in Florida, with new programs in Pasco and Marion counties. Chemed maintained its earnings guidance and expressed optimism about sustaining growth through organic expansion and acquisitions.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.