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Chemed’s (CHE - Free Report) VITAS business has been registering robust performance over the past few quarters. However, seasonality in business, competitive landscape and dependence on government mandates are concerns. The stock carries a Zacks Rank #3 (Hold).
Chemed’s VITAS segment is being driven by the strong adoption of its advanced hospice and palliative care services through a network of physicians, registered nurses, home health aides, social workers, clergy and volunteers.
In the third quarter, VITAS net revenues were up 12.5% year over year on a significant increase in days of care and a geographically weighted average Medicare reimbursement rate increase of approximately 2.7%.
Further, Roto-Rooter is currently the nation’s leading provider of plumbing, drain cleaning service and water restoration, reaching more than 90% of the U.S. population.
Chemed believes Roto-Rooter is well-positioned for growth and anticipates continued expansion of the segment’s market share, banking on the company’s core competitive advantages in terms of brand awareness, customer response time and 24/7 call centers and Internet presence. A notable e-marketing initiative by Roto-Rooter is to expand brand awareness among younger audiences by placing advertisements and content on various social media platforms, including Facebook, Instagram and YouTube.
In the third quarter, Roto-Rooter branch commercial revenues inched up 1.5% from the last year on 1.8% growth in excavation revenues and a 2% hike in commercial water restoration revenues.
On the flip side, in recent times, Chemed’s margin performance has been affected by the inflationary trend, increased logistics costs and higher employee-related expenses. In the third quarter, the company noted that full-year 2023 revenue growth is expected to be negatively impacted by 75 basis points as a result of the sequestration relief in the first half of 2022 compared to a full year of sequestration in 2023.
In the third quarter of 2023, the company registered a year-over-year increase of 35.8% in the cost of products and services by 4.5%.
Added to this, the market for sewer, drain and pipe cleaning and plumbing repair businesses is highly competitive. Competition is fragmented in most markets, with local and regional firms providing much of the competition. Besides, Hospice care in the United States is competitive as hospice services are generally uniform. As the hospice care industry is highly fragmented, VITAS competes with a large number of organizations on the basis of its ability to deliver quality, responsive services.
DexCom has a long-term expected earnings growth rate of 33.6%. Earnings estimates for 2023have increased from $1.23 to $1.41 in the past 30 days.
DXCM’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 36.43%. In the last reported quarter, it posted an earnings surprise of 47.1%.
Estimates for Insulet’s 2023 earnings per share have increased from $1.62 to $1.65 in the past 30 days. PODD has a long-term expected earnings growth rate of 41.5%.
Insulet’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 126.94%. In the last reported quarter, it delivered an earnings surprise of 58.33%.
Estimates for Haemonetics’ fiscal 2024 earnings have remained constant at $3.82 in the past 60 days. HAE has a long-term expected earnings growth rate of 10%.
Haemonetics’ earnings beat estimates in each of the trailing four quarters, with the average beat being 19.39%. In the last reported quarter, it delivered an earnings surprise of 38.16%.
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Chemed's (CHE) VITAS Performance Aids, Macro Issues Linger
Chemed’s (CHE - Free Report) VITAS business has been registering robust performance over the past few quarters. However, seasonality in business, competitive landscape and dependence on government mandates are concerns. The stock carries a Zacks Rank #3 (Hold).
Chemed’s VITAS segment is being driven by the strong adoption of its advanced hospice and palliative care services through a network of physicians, registered nurses, home health aides, social workers, clergy and volunteers.
In the third quarter, VITAS net revenues were up 12.5% year over year on a significant increase in days of care and a geographically weighted average Medicare reimbursement rate increase of approximately 2.7%.
Further, Roto-Rooter is currently the nation’s leading provider of plumbing, drain cleaning service and water restoration, reaching more than 90% of the U.S. population.
Chemed believes Roto-Rooter is well-positioned for growth and anticipates continued expansion of the segment’s market share, banking on the company’s core competitive advantages in terms of brand awareness, customer response time and 24/7 call centers and Internet presence. A notable e-marketing initiative by Roto-Rooter is to expand brand awareness among younger audiences by placing advertisements and content on various social media platforms, including Facebook, Instagram and YouTube.
Chemed Corporation Price
Chemed Corporation price | Chemed Corporation Quote
In the third quarter, Roto-Rooter branch commercial revenues inched up 1.5% from the last year on 1.8% growth in excavation revenues and a 2% hike in commercial water restoration revenues.
On the flip side, in recent times, Chemed’s margin performance has been affected by the inflationary trend, increased logistics costs and higher employee-related expenses. In the third quarter, the company noted that full-year 2023 revenue growth is expected to be negatively impacted by 75 basis points as a result of the sequestration relief in the first half of 2022 compared to a full year of sequestration in 2023.
In the third quarter of 2023, the company registered a year-over-year increase of 35.8% in the cost of products and services by 4.5%.
Added to this, the market for sewer, drain and pipe cleaning and plumbing repair businesses is highly competitive. Competition is fragmented in most markets, with local and regional firms providing much of the competition. Besides, Hospice care in the United States is competitive as hospice services are generally uniform. As the hospice care industry is highly fragmented, VITAS competes with a large number of organizations on the basis of its ability to deliver quality, responsive services.
Key Picks
Some better-ranked stocks in the broader medical space are Insulet (PODD - Free Report) , DexCom (DXCM - Free Report) and Haemonetics (HAE - Free Report) . While PODD carries a Zacks Rank #1 (Strong Buy) currently, DXCM and HAE carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
DexCom has a long-term expected earnings growth rate of 33.6%. Earnings estimates for 2023have increased from $1.23 to $1.41 in the past 30 days.
DXCM’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 36.43%. In the last reported quarter, it posted an earnings surprise of 47.1%.
Estimates for Insulet’s 2023 earnings per share have increased from $1.62 to $1.65 in the past 30 days. PODD has a long-term expected earnings growth rate of 41.5%.
Insulet’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 126.94%. In the last reported quarter, it delivered an earnings surprise of 58.33%.
Estimates for Haemonetics’ fiscal 2024 earnings have remained constant at $3.82 in the past 60 days. HAE has a long-term expected earnings growth rate of 10%.
Haemonetics’ earnings beat estimates in each of the trailing four quarters, with the average beat being 19.39%. In the last reported quarter, it delivered an earnings surprise of 38.16%.