Chemed Corp (CHE)

FairStock Score: 52/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

As a Buffett/Graham-style investor, I look first at business quality and then at price. Chemed is a two-headed operation: VITAS provides hospice and palliative care, while Roto-Rooter handles plumbing and drain cleaning. That mix gives defensive demand and a low beta of 0.51, but the numbers show a blemish. In fiscal Q2 2026, the quarter ended 2026-06-30, revenue was $673.3 million, net income $67.7 million, and diluted EPS $5.13. That compares well with fiscal Q2 2025, the quarter ended 2025-06-30, when revenue was $618.8 million, net income $52.5 million, and diluted EPS $3.57. Yet the full-year picture is less comforting: in FY2025, the year ended 2025-12-31, revenue was $2.5 billion and net income $265.2 million, while in FY2024, the year ended 2024-12-31, revenue was $1.5 billion and net income $302.0 million. The company earned less despite much higher reported revenue, so margins have compressed. FairStock's Lynch category is SLOW GROWER—Shrinking, citing profit falling 3.7% a year over five years. The balance sheet is a strength: D/E 0.35, Altman Z-Score 9.03, ROE 27.11%, and ROCE 13.45% (FairStock calculations). Free cash flow was $377.1 million trailing twelve months, a 5.8% FCF yield at the 2026-10-13 close. But price matters. At $500.77, FairStock calculates P/E 25.22, P/B 7.85, EV/EBITDA 16.24, and a Graham Number of $168.95, leaving a margin of safety of -196.40%. I would want a wider discount before calling this a Graham bargain. The business is solid, but the current valuation already assumes better growth than the filings show.

In plain English: Chemed runs two businesses: VITAS provides hospice and palliative care, and Roto-Rooter does plumbing, drain cleaning, and related services. The company generates solid cash and uses modest debt, but profit recently slipped and overall growth looks slow. At the recent price, the shares look expensive compared with the company's reported earnings and asset value, and the dividend is small.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer