Chemed (CHE) AI Stock Analysis

• Market Cap: $8.42B
• Dividend Yield: 0.33%
• Average Volume (3M): 137.83K
• Price to Earnings (P/E): 28.9
• Beta (1Y): 0.24
• Revenue Growth: 7.37%
• EPS Growth: 11.17%
• Country: US
• Employees: 15,695
• Sector: Healthcare
• Sector Strength: 74
• Industry: Medical - Care Facilities
• EPS (TTM): 19.91
• Shares Outstanding: 14,614,676
• 10 Day Avg. Volume: 147,814
• 30 Day Avg. Volume: 137,827
• PEG Ratio: 2.59
• Price to Book (P/B): N/A
• Price to Sales (P/S): 3.58
• Price to Cash Flow (P/CF): 13.20
• P/FCF Ratio: 13.20
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $687.50
• Price Target Upside: 16.91% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

Chemed's overall score reflects solid financial performance and positive growth prospects, particularly in VITAS. However, high valuation, market technicals indicating potential overbought conditions, and challenges outlined in the earnings call, such as Roto-Rooter's revenue decline and Medicare cap management, moderate the score.

Positive Factors

Card Spending

Card spending on Roto services increased +19% y/y in 4Q24, an acceleration from +11% y/y in 3Q24.

Commercial Growth

Roto growth is expected to accelerate driven by commercial growth and residential improving.

Revenue Performance

Roto outperformed internal metrics for revenue and income by 4-5% in Q4, with notable acceleration in metrics through the quarter.

Negative Factors

Medicare Cap

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.

Plumbing Demand

Google searches for 'plumbing' in 4Q24 declined -7% Q/Q, worse than pre-COVID Q/Q trends.

Search Data

The search data implies 4Q24 Roto revs would decline -13% y/y, much worse than consensus estimate.

Chemed Business Overview & Revenue Model

Company Description

Chemed 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 Money

Chemed 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's financial performance is strong with solid revenue growth and efficient operations. The income statement and cash flow metrics are impressive, but the lack of comprehensive balance sheet data for the current year is a notable gap.

Income Statement

Chemed has shown a strong upward trajectory in revenue, with consistent year-over-year growth. The Gross Profit Margin is at 100% for 2024 due to a classification issue, likely showing all revenue as gross profit. Net Profit Margin has remained solid, while EBIT and EBITDA margins indicate robust operational efficiency. The sustained growth and profitability metrics reflect a stable and expanding business.

Balance Sheet

Chemed's balance sheet shows a decrease in total debt over time, reflecting sound financial management. However, the absence of current year data on total assets and equity limits a thorough evaluation. Historically, the company has maintained a favorable debt-to-equity ratio and a healthy equity position, supporting financial stability.

Cash Flow

Chemed's cash flow statements exhibit a strong operating cash flow, consistently covering its net income, which is a positive indicator of cash generation efficiency. The Free Cash Flow has shown growth, which enhances financial flexibility. However, the latest data points are missing, limiting a complete assessment of recent trends.

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
39.65M	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

• Technical Analysis Sentiment: Neutral
• Last Price: 588.04
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Neutral. The current price of 588.04 is below the 20-day moving average (MA) of 602.26, above the 50-day MA of 581.01, and above the 200-day MA of 566.01, indicating a neutral trend. The MACD of 11.13 indicates Negative momentum. The RSI at 66.09 is Neutral, neither overbought nor oversold. The STOCH value of 76.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CHE.

Chemed Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ENSG	78 Outperform	$7.16B	24.36	17.90%	0.20%	15.52%	40.29%
OPCH	77 Outperform	$5.40B	26.73	14.99%	―	16.17%	-17.16%
EHC	72 Outperform	$9.76B	21.69	24.52%	0.65%	11.91%	28.47%
CHE	70 Outperform	$8.42B	28.92	27.12%	0.33%	7.37%	11.17%
SEM	66 Neutral	$2.02B	9.45	13.35%	2.79%	-0.63%	-13.10%
AMED	65 Neutral	$3.01B	70.13	3.93%	―	5.01%	―
Sector *	48 Neutral	$6.36B	1.24	-44.94%	2.70%	18.33%	1.47%