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CHE Stock Up Following Q1 Earnings & Revenue Beat, Margins Down
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Key Takeaways
Chemed Q1 EPS of $5.65 beat estimates, while revenues rose 1.6% to $657.5M, also topping forecasts.
CHE's VITAS revenues grew 3.1% on higher care days and Medicare rates, while Roto-Rooter sales dipped 0.9%.
Chemed's operating margin fell 170 bps as SG&A expenses rose 8.3% and costs increased.
Chemed Corporation (CHE - Free Report) reported first-quarter 2026 adjusted earnings per share (EPS) of $5.65, up 0.4% year over year. The figure surpassed the Zacks Consensus Estimate by 9.28%.
The company’s GAAP EPS was $4.84, down 0.4% from last year’s reported figure.
CHE’s Revenues
Revenues in the reported quarter came in at $657.5 million, rising 1.6% from the year-ago quarter’s figure. The metric topped the Zacks Consensus Estimate by 2.59%.
Following the earnings announcement on April 23, CHE stock rose nearly 10%, finishing at $421.11 on Friday.
CHE’s Q1 Segmental Details
Chemed operates through two wholly owned subsidiaries — VITAS (a major provider of end-of-life care) and Roto-Rooter (a leading commercial and residential plumbing plus drain cleaning service provider).
VITAS
In the first quarter, net patient revenues totaled $420 million, up 3.1% on a year-over-year basis. The rise in revenues was primarily due to a 2.2% increase in days-of-care and a 2.6% jump in the geographically weighted average Medicare reimbursement rate.
Chemed Corporation Price, Consensus and EPS Surprise
The segment reported sales of $237.5 million, down 0.9% year over year.
Total Roto-Rooter branch commercial revenues decreased 1.9% year over year. This aggregate commercial revenue change consisted of excavation plunging 7.8%, water restoration declining 10%, and drain cleaning falling 0.9%. This was offset by an increase in plumbing of 3.9%
Total Roto-Rooter branch residential revenues registered a decrease of 1.5% over the prior-year period. This aggregate residential revenue change consisted of water restoration declining 11.8%, offset by plumbing increasing 9.3%, excavation increasing 0.9%, and drain cleaning increasing 1.1%.
CHE’s Q1 Margin Performance
The gross profit decreased 0.3% year over year to $215.8 million in the first quarter of 2026. The gross margin contracted 64 basis points (bps) year over year to 32.8% due to a 2.6% increase in the cost of services provided and goods sold.
SG&A expenses rose 8.3% year over year to $114.3 million. The adjusted operating profit fell 8.5% from the year-ago period to $101.4 million. The adjusted operating margin contracted 170 bps to 15.4% during the quarter.
CHE’s Liquidity & Capital Structure
Chemed exited the first quarter with cash and cash equivalents of $16.9 million compared with $74.5 million at the end of 2025. Long-term debt came in at $91.2 million.
The cumulative net cash provided by operating activities was $88.2 million compared with $32.7 million in the year-ago period.
The company repurchased 500,000 shares of Chemed stock for $197.7 million, which equates to costs of $395.36 per share. As of March 31, 2026, there was $229.6 million of remaining share repurchase authorization under its plan.
Chemed has a consistent dividend-paying history, with five-year annualized dividend growth of 12.7%.
Chemed’s 2026 Guidance
For 2026, the company now expects revenues from VITAS, prior to Medicare Cap, to increase 6.5%-7.5% (earlier 5.5-6.5%) from the 2025 reported level. The Zacks Consensus Estimate for total revenues is pegged at $2.67 billion, which indicates a 5.5% year-over-year improvement.
Adjusted EPS for the year is now expected to be in the band of $24-$24.75 (previously, $23.25-$24.25). The Zacks Consensus Estimate for the metric is pegged at $23.74, which implies 10.2% growth from the 2025 adjusted figure.
Our Take on CHE
Chemed exited the first quarter of 2026 on a solid note, with both earnings and revenues beating respective estimates. VITAS restored its normal growth trajectory faster than anticipated following the 2025 Medicare Cap issue, driving stronger revenue performance. Roto-Rooter showed signs of improvement across multiple fronts, with both residential plumbing and residential sewer and drain revenues increasing for the first time since the fourth quarter of 2022.
On March 31, 2026, Roto-Rooter purchased the territory and assets of the franchises operating in San Francisco, CA, and Fort Worth, TX, in two separate transactions, aggregating to roughly $20.6 million. This purchase is part of Roto-Rooter’s ongoing strategy of acquiring franchises to boost productivity, market share and profitability.
Meanwhile, contraction of both margins in the quarter is discouraging.
CHE’s Zacks Rank and Key Picks
Chemed currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the broader medical space are Globus Medical (GMED - Free Report) , Intuitive Surgical (ISRG - Free Report) and Phibro Animal Health (PAHC - Free Report) .
Globus Medical, currently sporting a Zacks Rank #1 (Strong Buy), reported a fourth-quarter 2025 adjusted EPS of $1.28, which surpassed the Zacks Consensus Estimate by 20.8%. Revenues of $826.4 million beat the Zacks Consensus Estimate by 4.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.
GMED has an earnings yield of 4.7% compared to the industry’s negative 1.4% yield. The company beat earnings estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 18.79%.
Intuitive Surgical,carrying a Zacks Rank #2 (Buy) at present, posted a first-quarter 2026 adjusted EPS of $2.50, exceeding the Zacks Consensus Estimate by 20.2%. Revenues of $2.77 billion topped the Zacks Consensus Estimate by 6.2%.
ISRG has an earnings yield of 2.1% compared to the industry’s negative 0.9% yield. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 16.82%.
Phibro Animal Health,carrying a Zacks Rank #2 at present, posted a second-quarter fiscal 2026 adjusted EPS of 87 cents, exceeding the Zacks Consensus Estimate by 27.01%. Revenues of $373.9 million outperformed the Zacks Consensus Estimate by 4.72%.
PAHC has an estimated long-term earnings growth rate of 21.5% compared with the industry’s 12.1% growth. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 20.15%.
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CHE Stock Up Following Q1 Earnings & Revenue Beat, Margins Down
Key Takeaways
Chemed Corporation (CHE - Free Report) reported first-quarter 2026 adjusted earnings per share (EPS) of $5.65, up 0.4% year over year. The figure surpassed the Zacks Consensus Estimate by 9.28%.
The company’s GAAP EPS was $4.84, down 0.4% from last year’s reported figure.
CHE’s Revenues
Revenues in the reported quarter came in at $657.5 million, rising 1.6% from the year-ago quarter’s figure. The metric topped the Zacks Consensus Estimate by 2.59%.
Following the earnings announcement on April 23, CHE stock rose nearly 10%, finishing at $421.11 on Friday.
CHE’s Q1 Segmental Details
Chemed operates through two wholly owned subsidiaries — VITAS (a major provider of end-of-life care) and Roto-Rooter (a leading commercial and residential plumbing plus drain cleaning service provider).
VITAS
In the first quarter, net patient revenues totaled $420 million, up 3.1% on a year-over-year basis. The rise in revenues was primarily due to a 2.2% increase in days-of-care and a 2.6% jump in the geographically weighted average Medicare reimbursement rate.
Chemed Corporation Price, Consensus and EPS Surprise
Chemed Corporation price-consensus-eps-surprise-chart | Chemed Corporation Quote
Roto-Rooter
The segment reported sales of $237.5 million, down 0.9% year over year.
Total Roto-Rooter branch commercial revenues decreased 1.9% year over year. This aggregate commercial revenue change consisted of excavation plunging 7.8%, water restoration declining 10%, and drain cleaning falling 0.9%. This was offset by an increase in plumbing of 3.9%
Total Roto-Rooter branch residential revenues registered a decrease of 1.5% over the prior-year period. This aggregate residential revenue change consisted of water restoration declining 11.8%, offset by plumbing increasing 9.3%, excavation increasing 0.9%, and drain cleaning increasing 1.1%.
CHE’s Q1 Margin Performance
The gross profit decreased 0.3% year over year to $215.8 million in the first quarter of 2026. The gross margin contracted 64 basis points (bps) year over year to 32.8% due to a 2.6% increase in the cost of services provided and goods sold.
SG&A expenses rose 8.3% year over year to $114.3 million. The adjusted operating profit fell 8.5% from the year-ago period to $101.4 million. The adjusted operating margin contracted 170 bps to 15.4% during the quarter.
CHE’s Liquidity & Capital Structure
Chemed exited the first quarter with cash and cash equivalents of $16.9 million compared with $74.5 million at the end of 2025. Long-term debt came in at $91.2 million.
The cumulative net cash provided by operating activities was $88.2 million compared with $32.7 million in the year-ago period.
The company repurchased 500,000 shares of Chemed stock for $197.7 million, which equates to costs of $395.36 per share. As of March 31, 2026, there was $229.6 million of remaining share repurchase authorization under its plan.
Chemed has a consistent dividend-paying history, with five-year annualized dividend growth of 12.7%.
Chemed’s 2026 Guidance
For 2026, the company now expects revenues from VITAS, prior to Medicare Cap, to increase 6.5%-7.5% (earlier 5.5-6.5%) from the 2025 reported level. The Zacks Consensus Estimate for total revenues is pegged at $2.67 billion, which indicates a 5.5% year-over-year improvement.
Adjusted EPS for the year is now expected to be in the band of $24-$24.75 (previously, $23.25-$24.25). The Zacks Consensus Estimate for the metric is pegged at $23.74, which implies 10.2% growth from the 2025 adjusted figure.
Our Take on CHE
Chemed exited the first quarter of 2026 on a solid note, with both earnings and revenues beating respective estimates. VITAS restored its normal growth trajectory faster than anticipated following the 2025 Medicare Cap issue, driving stronger revenue performance. Roto-Rooter showed signs of improvement across multiple fronts, with both residential plumbing and residential sewer and drain revenues increasing for the first time since the fourth quarter of 2022.
On March 31, 2026, Roto-Rooter purchased the territory and assets of the franchises operating in San Francisco, CA, and Fort Worth, TX, in two separate transactions, aggregating to roughly $20.6 million. This purchase is part of Roto-Rooter’s ongoing strategy of acquiring franchises to boost productivity, market share and profitability.
Meanwhile, contraction of both margins in the quarter is discouraging.
CHE’s Zacks Rank and Key Picks
Chemed currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the broader medical space are Globus Medical (GMED - Free Report) , Intuitive Surgical (ISRG - Free Report) and Phibro Animal Health (PAHC - Free Report) .
Globus Medical, currently sporting a Zacks Rank #1 (Strong Buy), reported a fourth-quarter 2025 adjusted EPS of $1.28, which surpassed the Zacks Consensus Estimate by 20.8%. Revenues of $826.4 million beat the Zacks Consensus Estimate by 4.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.
GMED has an earnings yield of 4.7% compared to the industry’s negative 1.4% yield. The company beat earnings estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 18.79%.
Intuitive Surgical,carrying a Zacks Rank #2 (Buy) at present, posted a first-quarter 2026 adjusted EPS of $2.50, exceeding the Zacks Consensus Estimate by 20.2%. Revenues of $2.77 billion topped the Zacks Consensus Estimate by 6.2%.
ISRG has an earnings yield of 2.1% compared to the industry’s negative 0.9% yield. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 16.82%.
Phibro Animal Health,carrying a Zacks Rank #2 at present, posted a second-quarter fiscal 2026 adjusted EPS of 87 cents, exceeding the Zacks Consensus Estimate by 27.01%. Revenues of $373.9 million outperformed the Zacks Consensus Estimate by 4.72%.
PAHC has an estimated long-term earnings growth rate of 21.5% compared with the industry’s 12.1% growth. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 20.15%.