Chemed carries strong cash conversion and a solid balance sheet, but 95% of revenue depends on government reimbursement and the company has missed earnings estimates in 3 of the last 4 quarters — a combination of structural payer concentration and recent execution shortfalls that justifies a cautious stance while momentum and risk/reward remain unfavorable.
Thesis pillars
- Government Payer Concentration Cliff→Stable
- Strong Cash Conversion Quality→Stable
- Deteriorating Earnings Track Record↑Improving
- +1 more pillar — see the Why tab for full reasoning
Pillars as of Jul 3, 2026, based on the 10-K filed Feb 27, 2026
Chemed Corp (CHE) Stock Analysis
Healthcare · Medical Care Facilities
Hold if already holding. Not a fresh buy at $533.36, but acceptable to hold if already in. Reasons: Healthcare gov-payer cliff: 95% of revenue from Medicare and Medicaid (≥70% threshold). CMS rate-change exposure dominates.; Concentration risk — Customer: Medicare and Medicaid (95.0%).
Chemed Corporation operates two segments: VITAS, one of the nation's largest hospice care providers reimbursed on a per-diem basis by Medicare and Medicaid, and Roto-Rooter, a national plumbing, drain, and water restoration services franchise. Over 95% of VITAS net patient... Read more
Hold if already holding. Not a fresh buy at $533.36, but acceptable to hold if already in. Reasons: Healthcare gov-payer cliff: 95% of revenue from Medicare and Medicaid (≥70% threshold). CMS rate-change exposure dominates.; Concentration risk — Customer: Medicare and Medicaid (95.0%). Chart setup: No clear chart pattern; technical signals are mixed. Maintain position. Not compelling to add more. Score 6.2/10, moderate confidence.
Passes 6/8 gates (positive momentum, clean insider activity, no SEC red flags, earnings proximity 118d clear, semi cycle peak clear, materials cycle peak clear). Fails on favorable risk/reward ratio and healthcare gov payer hard block. Suitability: moderate.
About Chemed Corp
About Chemed Corp
Chemed Corporation's VITAS segment draws over 95% of its net patient service revenue from Medicare and Medicaid payments on a per-diem basis, making it one of the nation's largest hospice care providers in an industry dominated by small, community-based organizations. Roto-Rooter, the company's second segment, provides plumbing, drain cleaning, excavation, and water restoration services to residential and commercial customers across the U.S. A significant portion of VITAS operations are concentrated in Florida, where Medicare patients relocating during winter months generate higher seasonal admissions.
VITAS earns revenue at four levels of Medicare care — Routine Home Care, Continuous Home Care, Inpatient Care, and Respite Care — each reimbursed at distinct per-diem rates that are subject to annual adjustment based primarily on the hospital wage index basket, regionally computed. Approximately 15% to 20% of VITAS days of care are provided to patients residing in nursing homes, where VITAS bills and collects from state Medicaid programs at roughly 95% of the applicable Medicaid nursing home per diem for room and board. VITAS competes with community-based hospice providers, national and regional companies, hospital-based hospice programs, and nursing homes; relatively few barriers to entry exist in many of its markets. Roto-Rooter competes in highly fragmented local and regional markets primarily on advertising, name recognition, emergency availability, and pricing; private equity investment in home services companies, including plumbing, has recently intensified competition.
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VITAS's revenue base is structurally tied to Medicare and Medicaid rate-setting, which the 10-K notes is subject to statutory and regulatory changes, including retroactive adjustments and funding reductions. Federal budget deliberations frequently target the hospice benefit specifically for cuts, and reductions to coverage or payment rates — including the elimination of Medicaid room-and-board payments for nursing home patients — could materially reduce Chemed's net patient service revenue and profitability. Certificate of Need laws in states including Florida and California also constrain VITAS's ability to expand capacity, exposing the company to regulatory approval risk when entering new or existing geographic markets.
See also: Healthcare · Medical Care Facilities
From Chemed Corp's most recent 10-K filing, extracted June 9, 2026.
Recent developments
updated 2026-10-29Recent Developments — Chemed Corp
Latest news
- NEWS Chemed (CHE) Q1 Earnings: What To Expect - Yahoo Finance — Yahoo Finance neutral
- NEWS Chemed (CHE) Q1 Earnings: What To Expect - TradingView — TradingView neutral
- NEWS Chemed (CHE) Q1 Earnings: What To Expect - FinancialContent — FinancialContent neutral
- NEWS Q2 Earnings Highs And Lows: Chemed (NYSE:CHE) Vs The Rest Of The Senior Health, Home Health & Hospice Stocks - Yahoo Fin — Yahoo Finance neutral
- NEWS Chemed Corporation $CHE Stock Position Cut by NewEdge Wealth LLC - MarketBeat — MarketBeat neutral
Generated 2026-10-29T11:53:50Z.
Upcoming dated catalysts
Thesis
Key Metrics
Quality Signals
Options Flow
Concentration Risks(10-K Item 1A)
- HIGHCustomerMedicare and Medicaid95%10-K Item 1A: 'In excess of 95% of VITAS' net patient service revenue consists of payments from the Medicare and Medicaid programs'
- MEDIUMGeographicFlorida10-K Item 1: 'A significant portion of our VITAS business is operated in the state of Florida'
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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Verdict History
Frequently Asked Questions
Hold if already holding. Not a fresh buy at $533.36, but acceptable to hold if already in. Reasons: Healthcare gov-payer cliff: 95% of revenue from Medicare and Medicaid (≥70% threshold). CMS rate-change exposure dominates.; Concentration risk — Customer: Medicare and Medicaid (95.0%). Chart setup: No clear chart pattern; technical signals are mixed. Maintain position. Not compelling to add more. Analyst target $515.56 reached (−3.3%), stop $505.44 (−5.5%), A.R:R -0.5:1. Score 6.2/10, moderate confidence.
Analyst target $515.56 reached (−3.3% from $533.36); no take-profit level is published. Analyst target $515.56 reached (−3.3%), stop $505.44 (−5.5%), A.R:R -0.5:1. Stop-loss: $505.44.
Healthcare gov-payer cliff: 95% of revenue from Medicare and Medicaid (≥70% threshold). CMS rate-change exposure dominates.; Concentration risk — Customer: Medicare and Medicaid (95.0%); Analyst target reached - limited upside remaining.
Chemed Corp trades at a P/E of 25.5 (forward 19.2). TrendMatrix value score: 5.1/10. Verdict: Hold.
9 analysts cover CHE with a consensus score of 3.8/5. Average price target: $593.
What does Chemed Corp do?Chemed Corporation operates two segments: VITAS, one of the nation's largest hospice care providers reimbursed on a...
Chemed Corporation operates two segments: VITAS, one of the nation's largest hospice care providers reimbursed on a per-diem basis by Medicare and Medicaid, and Roto-Rooter, a national plumbing, drain, and water restoration services franchise. Over 95% of VITAS net patient service revenue comes from Medicare and Medicaid; a significant portion of VITAS operations are concentrated in Florida.