Watch · 66/100 · medium confidence

CHEMED CORP (CHE) — Council Assessment

🟡 WATCH · Score 66/100 · medium confidence

High-quality, net-cash dual-business at a fair-to-cheap price with real DCF upside, but a damaged-credibility recovery story that most lenses want to see prove out over 1-2 quarters.

As of 2026-06-28. 18 lenses weighed in, 0 abstained. Sources: 6 filings, 15 news, 15 discussion, 1 earnings_call.

360 narrative — news & sentiment digest

CHEMED CORP (CHE) — INVESTMENT BRIEFING

Management Commentary (Q2 2025 Earnings Call)

Tone & Candor:
Management acknowledges "performance of both operating units did not meet our expectations" but maintains confidence in fundamentals and strategic direction. The call is notably candid about headwinds: tariff-driven consumer weakness, Medicare cap challenges, and search-engine monetization pressures. Executives distinguish between operational issues (solvable) and structural headwinds (harder to fix).

VITAS (Hospice) — Revenue & Growth:

Q2 2025 admissions: 17,545 (+1.2% YoY, but +4.9% ex-Covenant Health transfers from Apr 2024)
Average daily census: 22,318 (+6.1% YoY)
Revenue: $396.2M (+5.8% YoY); driven by 6.1% day-of-care growth and 4.2% reimbursement rate increase
Acuity mix shift negatively impacted revenue by 71 bps; Medicare cap and contra-revenue changes hit by 379 bps

Medicare Cap Crisis (Florida):

$16.4M cap accrual in Q2 2025 ($9.5M catch-up for H1, $4.8M current quarter, $2.1M other programs)
2025 projection: $19M Florida cap + $9.2M other programs = $28.2M total
Root cause: Florida's 5% reimbursement increase vs. national 2% cap increase created $22M starting headwind; weak April–May admissions (esp. short-stay referrals) derailed mitigation efforts
Management projects $19M cap in Q3 2025; zero cap in Q4 2025 and 2026 (assumes rate differential doesn't persist)

Mitigation Strategy:

Shift to hospital admissions (+9.1%) vs. nursing home/assisted living (down 2.9–6.2%)
Admit "short-stay" patients; manage patient bubble from COVID-era community access program (long-stay bubble naturally aging out)
Ramp new CON markets (Marion, Citrus counties; Pinellas County awarded but pre-revenue)
Management projects 17.5%–18.5% EBITDA margins in 2026 (vs. 19%+ historically)

Adjusted EBITDA (ex-cap): $66.8M in Q2; margin 16.2% (down 163 bps YoY) due to short-stay mix shift and expense reviews underway.

2025 VITAS Guidance (revised):

Revenue growth (pre-cap): 7.5%–8.5%
Adjusted EBITDA margin (pre-cap): 18.2%–18.7%

Roto-Rooter — Revenue & Margin Collapse:

Q2 2025 branch residential revenue: $156.4M (+0.9% YoY)
Commercial revenue: $53.2M (+4.4% YoY)
Adjusted EBITDA: $48.6M, down 18.7% YoY; margin 21.8% (down 517 bps YoY)

Key Issues:

Consumer demand weakness: April–May particularly soft. Management attributes to "Liberation Day" tariff announcement chilling consumer confidence; large consumer-facing peers reported similar effect. June–July showing rebound "closer to internal expectations."
Labor inefficiency: Selective headcount increases in Q1 (based on late-2024/early-2025 optimism) created idle technician time in April–May downturn. Led to discounting, higher commission rates, and margin compression.
Insurance actuarial hit: ~220 bps margin headwind from casualty/workers' comp cost accrual (new policy; actuarial assumption of higher claims). Management does not expect this to persist; included $4M additional cost buffer in H2 guidance.
Search engine marketing shift: Paid searches now ~50% of leads (vs. 40% historical). Unpaid/organic search visibility declining due to Google monetization; cost per lead rising as % of revenue.
Independent contractor weakness: -4.4% revenue YoY (smaller regional players lack add-on service capability).

Positive offset: Water restoration (+16.9% residential, +24.4% commercial) and excavation growth partially offsetting drain-cleaning/plumbing declines vs. private equity competitors.

2025 Roto-Rooter Guidance (revised):

Revenue growth: 1.25%–1.75%
Adjusted EBITDA margin: 23.5%–24.5%

Consolidated 2025 EPS Guidance (revised down):

Adjusted diluted EPS: $22.00–$22.30 (prior: $24.95–$25.45)
Reduction of ~$2.80 at midpoint (~11%)
Assumes 25.3% tax rate, 14.7M shares

Capital Allocation & Q&A Highlights:

Analyst Q: Cap outlook for 2026

Management projects rate increase in Florida will likely exceed national average (widening cap spread); but will reserve excess reimbursement against potential future cap accrual, managing conservatively (opposite of 2025 approach).
"Internally, 19 going to zero, not 19 going to 40."
New CON awards (Pinellas: ~8,600 admits/year, ~$350M cap coverage) not yet in 2026 base case but upside if on track.

Analyst Q: Roto-Rooter recovery timing

Management confident June–July revenue trends support normalized margins in H2.
Insurance cost headwind assumed to moderate but not fully disappear; $2M/quarter buffer included in guidance.
Focus on conversion efficiency (now ~50% of leads to paying jobs, above historical average) and add-on services.

Analyst Q: M&A strategy

No change in strategy. Will pursue VITAS acquisitions only at "right valuation" and right location. Long lead times (cold-calling hospice groups).
Balance sheet remains strong; buybacks and M&A not mutually exclusive. "Expect some movement in Q3 on share buyback perspective."

Recent Developments

Q2 2025 results (July 29, 2025): Earnings and revenue below internal expectations; 2025 EPS guidance cut 11%.
Florida Medicare cap: Accelerated from expected mitigation to $19M 2025 accrual due to April–May admission weakness.
Roto-Rooter insurance adjustment: $5M actuarial hit in Q2; new policy deductible/coverage structure in place.
CON awards: Pinellas County (FL) awarded; Marion and Citrus County ramp-ups underway in VITAS.

Bull Narrative

VITAS fundamentals remain strong: +4.9% admissions growth ex-Covenant transfers, +6.1% ADC growth, 9.1% hospital admissions (higher-margin, short-stay focus). Cap issue framed as temporary 2025 anomaly, driven by unusual reimbursement spread, not demand.
Cap problem solvable operationally: Management's mix-shift strategy (hospital admissions, short-stay patients) is already showing Q2 traction; new CON markets (esp. Pinellas) poised to provide runway in 2026.
Roto-Rooter near inflection: April–May weakness attributed to one-time tariff/consumer sentiment shock and labor/insurance misalignment. June–July rebound suggests normalization. Water restoration and excavation add-on services are growing and higher-margin.
Conservative 2026 guidance: Management explicitly planning for zero Florida cap in 2026 and assuming no rate-differential credit; any positive rate surprise = upside.
Strong balance sheet: No debt; capacity for M&A and buybacks. Signals confidence in core business recovery.

Sources: Management call; analyst questions (Jeffries, RBC, Bank of America) largely accept thesis and dig into mechanics.

Bear Narrative

Massive EPS miss: Q2 guidance slashed from $24.95–$25.45 to $22.00–$22.30 (~11% cut), signaling either weak forward visibility or management miscalibration in prior quarters.
Medicare cap = recurring risk: While framed as 2025 anomaly, the 3% differential between Florida and national rates is structural. Management's "reserve" approach for 2026 may protect EBITDA optics but risks repeated admission/revenue pressure if Florida inflation stays elevated.
Roto-Rooter's fundamental headwinds:
- Google's search monopoly is permanent, not temporary. Paid search now 50% of leads; cost pressure will persist.
- Drain cleaning/plumbing segment declining vs. private equity rivals; no evidence of market share recovery yet.
- Insurance costs cited as one-time, but workers' comp and casualty inflation may be structural in service economy.
- Leads down 7.2% YoY; "Liberation Day" tariff shock is a handy excuse, but underlying demand is soft.
Margin compression expected: VITAS 2026 EBITDA margin guided 17.5%–18.5% vs. 19%+ historically. Roto-Rooter 23.5%–24.5% (already down 100+ bps from historical 25%+).
Execution risk: Management betting on CON ramp-up and mix shift, but both take time and execution risk is high in healthcare M&A and operational repositioning.

Sources: Retail commentary (Zacks, hunanddone, ZacksResearch) calls out "triple hit to confidence" from Q4 miss; sentiment shifted sharply post-earnings.

Retail Sentiment

Overall: Bearish-to-mixed, with declining conviction post-Q2.

Q4 2025 aftermath (late Feb 2026): Stock fell 15% on earnings miss. Sentiment: "slaughter," "small miss" understatement, margin contraction shock. One forum participant noted valuation had compressed from 24x trailing to <20x, and speculated on dead-cat bounce opportunity.
Post-Q1 2026 rebound: Stock rallied +8.4% pre-market on Q1 beat. Sentiment shifted slightly more optimistic; some "required reading" on CHE turnaround narrative circulating (EveryTicker). But conviction remains low—most mentions are passive (earnings recap, analyst estimates).
Overall conviction: Low. Retail treating CHE as a "show me" story; no strong bull or bear conviction emerging from forums. Mentions tend to be technical (price targets, options activity) rather than fundamental debate.

Caveats

Earnings call transcript incomplete: Provided call abruptly cuts off mid-Q&A; final questions and full management remarks on capital allocation/strategic commentary missing.
No recent earnings call post-Feb 2026: Q4 2025 earnings (late Feb 2026) caused 15% sell-off per retail sources; Q1 2026 (Apr 23 call) raised FY 2026 guidance to $24.00–$24.75, suggesting recovery narrative, but no Q1 2026 transcript provided to validate or contextualize.
Retail sources thin & varied quality: Mix of news aggregators, analyst alerts (Zacks), and forum chatter. No dedicated short report or institution-specific equity research provided.
Macro sensitivity unclear: Roto-Rooter "tariff shock" explanation is plausible but unverified. No data on whether other consumer-service stocks actually rebounded post-tariff announcement; if they didn't, Roto-Rooter's weak April–May may indicate idiosyncratic weakness.
Medicare cap modeling opaque: Management's future cap projections depend on admission trends, reimbursement rates (TBD Q3), and CON ramp timing—all assumptions. "Conservative" framing could mask genuine execution risk.
Valuation not provided: No P/E multiples, DCF, or target prices in materials; hard to assess risk/reward.

Summary for Investment Council

CHE is a dual-business story in transition: V

Bull case

CHE generates a genuine 23.9% ROIC and 24% FCF margin on a fortress net-cash balance sheet ($178M cash vs $92.5M LT debt), trading at a reasonable 16.7x P/FCF. VITAS has a real regulatory moat (CON licensing, Medicare certification, referral-network switching costs) with a multi-decade demographic tailwind, validated by Mauboussin, Munger and Greenwald. The DCF pegs base intrinsic value at $738 (59% upside) with even the bear case ($554) ~20% above the current $463. Q1 2026 beat and a raised FY26 guide ($24.00-$24.75) suggest the 2025 trough is passing. Valuation referee (78) and multiple quality lenses see too-pessimistic embedded expectations. Not an AI/disruption casualty.

Bear case

This is a 'show me' recovery resting on management-asserted claims: zero Florida Medicare cap in 2026 (after a $28M 2025 accrual driven by a structural rate differential that could recur) and Roto-Rooter margin stabilization. Roto-Rooter faces a genuinely secular, not cyclical, headwind — Google search/AI Overviews permanently raising cost-per-lead (paid leads now 50% vs 40%), with EBITDA margins guided down to 21.5-22.5% from 25%+ historically. Management credibility is dented: an 11% mid-2025 guidance cut and a Q4 2025 miss that dropped the stock 15%. The DCF is 82% terminal value, and Greenwald's EPV lands at just ~$307 — 51% below the current price — meaning you're paying up for growth that is only partly moat-protected. Schloss avoids outright on 5.5x book at a mid-range price.

Dissent — where the council disagrees

The sharpest disagreement is between the value-of-cashflows camp (Valuation Referee 78, Greenblatt 76, Greenwald 74, Munger 74, Mauboussin 72, Dalio 72 — all Pass) and the price-discipline skeptics. Greenwald, though nominally a Pass, explicitly says the current $463 is 51% ABOVE his ~$307 EPV and would only buy at $380-420 — a critical caveat that undercuts the clean DCF upside the referee cites. Schloss (Avoid, 28) flags that 82% of DCF value is terminal-value forecast and the stock trades at a 52-week-area price with no dislocation. Druckenmiller (48) warns DCF upside without a real earnings-acceleration catalyst is a value trap. The tension that matters: the bull thesis depends on management's falsifiable claims (zero 2026 cap, RR margin recovery) that they already missed once, and on treating a structural Google/AI CAC headwind as temporary. That combination is why this lands Watch, not Pass.

Key risks

Florida Medicare cap recurs in 2026 despite management's 'zero cap' projection — a structural rate-differential risk they already misjudged in 2025
Roto-Rooter margin compression proves permanent as Google AI Overviews/paid-search structurally raise cost-per-lead (50% paid leads and rising)
Management credibility gap: 11% mid-2025 guidance cut and Q4 2025 miss indicate poor forward visibility in both segments
DCF is 82% terminal value; Greenwald EPV of ~$307 implies the price already embeds substantial unproven growth
Unexplained GAAP net income anomaly ($302K vs $366M operating income / $368M FCF) — almost certainly an accounting artifact but unverified in available filings
Roto-Rooter (~40% of revenue) is consumer/housing-cyclical and showed real vulnerability to a demand shock in 2025

Catalysts

Q2 2026 results (late July) confirming VITAS cap at/near zero and Roto-Rooter margins recovering toward 23%+
Continued FY2026 guidance validation/raise beyond $24.00-$24.75
VITAS CON market ramp (Pinellas, Marion, Citrus counties) driving census growth
Aggressive buybacks given net-cash balance sheet and only 13.8M shares outstanding
Clarification of the GAAP net income anomaly in the 10-K notes removing an overhang

DCF valuation (finance-expert model)

two-stage DCF, Gordon terminal value, CAPM-weighted WACC.

Intrinsic value: $738.22/share vs price $463.28 → +59% (bear $554.0 · base $738.22 · bull $804.2).

Step	Value
Base free cash flow	$368M
FCF growth (yrs 1-5)	6.7% (revenue CAGR)
WACC (β 0.504)	7.0%
Terminal growth	2.5%
PV of explicit FCF	$1.8B
PV of terminal (residual) value	$8.3B (82% of EV)
Enterprise value	$10.1B
less Net debt	$-86M
= Equity value	$10.2B
/ Shares (14M) = intrinsic/share	$738.22

Short-sell evaluation

🚫 AVOID SHORTING

Despite decelerating segment margins and a credibility-dented management team, CHE is a poor short. The core forensic tests run the wrong way: cash flow ($417M OCF, $368M FCF) massively exceeds reported earnings rather than lagging it, the balance sheet is net cash with no refinancing wall, and the accounting is clean (the near-zero GAAP net income is a benign artifact, not a red flag). The stock trades below multiple credible intrinsic-value estimates ($554 bear DCF, $738 base) with a low beta (0.50) and defensive, demographically-driven hospice demand. The only genuine short angle — Roto-Rooter's structural CAC inflation and VITAS Medicare cap recurrence — is a margin-erosion story already partly priced in after a 15% drop and an 11% guide cut, not a solvency or fraud thesis. Shorting a net-cash, high-FCF, moated defensive with thin float against unlimited-downside asymmetry is a low-conviction trade.

Pros (the short could work)

Roto-Rooter margins structurally pressured by Google search/AI-driven CAC inflation (paid leads 50% vs 40%), guided down to 21.5-22.5% from 25%+
VITAS Medicare cap risk in Florida is structural, not one-time; a 2026 recurrence would blow through management's 'zero cap' assumption
Damaged management credibility: 11% mid-2025 guidance cut and Q4 2025 miss show poor forward visibility
On Greenwald's EPV (~$307) the stock is ~51% overvalued if the growth premium fails to materialize; 82% of DCF value is terminal-value forecast
Director insider selling (modest) and margin compression in BOTH segments simultaneously

Cons (what kills the short)

Cash flow decisively exceeds reported earnings — the opposite of a classic forensic short setup; accounting quality is high
Fortress net-cash balance sheet ($178M cash vs $92.5M debt) — no leverage, no debt wall, no financing pressure
High-quality defensive with 23.9% ROIC, 24% FCF margin, and non-cyclical hospice demand — durable moat resists a thesis breaking
Trades below bear-case DCF ($554) and well below base case; already fell 15% and re-rated down — much of the bad news is priced
Low beta (0.50), thin float (~13.8M shares) and active buybacks create squeeze/asymmetry risk against unlimited short downside
Q1 2026 beat and raised guidance show positive momentum in the recovery narrative — dangerous to short into an inflection

Council scorecard

Lens	School	Stance	Score	Conf
Valuation Referee (Damodaran-style)	referee	🟢 pass	78	medium
Joel Greenblatt	value	🟢 pass	76	medium
Bruce Greenwald	value	🟢 pass	74	medium
Charlie Munger	quality	🟢 pass	74	medium
Michael Mauboussin	quality	🟢 pass	74	medium
Ray Dalio	risk	🟢 pass	72	medium
Forensic Short-Seller (Chanos/Einhorn-style)	referee	🟢 pass	72	medium
AI & Disruption Referee (Christensen-style)	referee	🟢 pass	72	medium
Warren Buffett	quality	🟡 watch	62	medium
Terry Smith (Fundsmith)	quality	🟡 watch	62	medium
Chuck Akre	quality	🟡 watch	58	medium
Seth Klarman	value	🟡 watch	58	medium
Howard Marks	risk	🟡 watch	58	medium
Benjamin Graham	value	🟡 watch	52	medium
Stanley Druckenmiller	risk	🟡 watch	48	medium
Philip Fisher	growth	🟡 watch	48	medium
Peter Lynch	growth	🟡 watch	48	medium
Walter Schloss	value	🔴 avoid	28	high

Member reasoning

Valuation Referee (Damodaran-style) — 🟢 pass · 78/100 · medium confidence

The two-stage DCF yields an intrinsic value of $738/share against a current price of $463, implying 59% upside even in the base case. The bear sensitivity is $554, meaning the stock trades at a 16% discount to the bear case — this is genuine margin of safety. Let me stress-test the key DCF assumptions. WACC of 7.0% uses a beta of 0.504, which is appropriate for a low-volatility healthcare/services hybrid; with a risk-free rate near 4.5% and a 5.5% equity risk premium, this is defensible. Terminal growth of 2.5% is slightly above a 2.0% conservative floor but within the nominal GDP growth range for a U.S. healthcare services company with a genuine aging demographic tailwind — acceptable. The FCF growth assumption of 6.67% (from 3-year revenue CAGR) is the most vulnerable input: it applies to FCF, but FCF margin has actually expanded from ~20% to ~24% in 2024 (FCF $368M on $1.53B revenue). If we instead assume modest FCF growth of 4-5% reflecting normalization of margins back toward 20-21%, intrinsic value still substantially exceeds $463. The terminal value is 81.9% of enterprise value — high but not unusual for a stable, capital-light services company with recurring demand. ROIC of 23.9% vs. WACC of 7.0% represents massive spread, validating value-creating growth. The sales-to-capital ratio is high (debt-to-equity only 0.083, capex just $49.5M against $1.53B revenue and $368M FCF), confirming asset-light operations that don't require heavy reinvestment to sustain growth. The implied expectations embedded in the $463 price are actually quite modest: at P/FCF of 16.7x with 6.7% FCF growth, the market is pricing in near-stagnation or significant margin compression. Even under a scenario where VITAS Medicare cap issues persist in 2026, Roto-Rooter margins remain compressed at 21.5-22.5%, and FCF growth drops to 3%, the stock is likely worth $550-600+. The key risks are: (1) the Florida Medicare cap is not purely one-time — the 3% rate differential is structural and could recur; (2) Roto-Rooter's rising paid-search dependency represents a structural, not cyclical, cost pressure that will permanently raise the cost-per-lead; (3) net income reported as $301,999 (essentially zero in GAAP terms vs. $302M FCF) reflects unusual items — while FCF is the right metric here, the GAAP anomaly needs explanation (likely non-cash charges or tax items). The price-to-book of 5.5x and price-to-sales of 4.0x are not 'cheap' on face value, but the 24% FCF margin and 23.9% ROIC justify premium multiples. Overall, the DCF math is solid, the margin of safety is real even in a bear case, ROIC far exceeds WACC, reinvestment is capital-efficient, and the implied market expectations are pessimistic enough to leave room for fundamental recovery.

Key points

Base DCF intrinsic value $738/share vs. $463 price = 59% upside; bear case $554 still 20% above current price, providing genuine margin of safety
ROIC of 23.9% far exceeds WACC of 7.0%, confirming growth is value-creating, not value-destroying
FCF margin expanded to 24.0% in 2024 from 20% range; P/FCF of 16.7x is undemanding for a business generating this return profile
Capital-light model: capex only $49.5M on $1.53B revenue; high sales-to-capital validates FCF growth achievability without heroic reinvestment
WACC of 7.0% is defensible given low beta (0.504), minimal leverage (D/E 0.083), and stable healthcare/services cashflows
Terminal growth of 2.5% is within nominal GDP range; appropriate for a demographic-tailwind hospice operator
6.67% FCF growth assumption moderate — even at 3-4% growth, intrinsic value remains well above $463
Stock trading at 52-week low vicinity, with market already pricing in persistent operational headwinds

Red flags

Terminal value is 81.9% of enterprise value — small changes in terminal growth or WACC have outsized impact; stress test shows $554 bear still above price but sensitivity is real
Florida Medicare cap structural risk: 3% rate differential is not guaranteed to disappear; management's zero-cap 2026 assumption may be overly optimistic
Roto-Rooter paid-search dependency (50% of leads) is a structural margin headwind, not cyclical — cost per lead will likely remain elevated permanently
GAAP net income reported as ~$302K vs. $368M FCF is an extreme divergence requiring explanation — likely large non-cash charges that could recur
Revenue CAGR used as FCF growth proxy may overstate sustainable FCF growth if margins normalize downward from 2024's elevated 24%
Director selling activity (1,347 shares Jun 2026, 500 shares May 2026) is a mild negative signal, though context (compensation liquidation vs. conviction sale) is unknown

Joel Greenblatt — 🟢 pass · 76/100 · medium confidence

Chemed is a legitimate Magic Formula candidate: a profitable, cash-generative operating business with two distinct segments (VITAS hospice and Roto-Rooter plumbing) where EBIT and invested capital are measurable. Let me run the key inputs. EBIT (operating income) was $366.5M in FY2024. Enterprise Value: market cap ~$6.15B + long-term debt $92.5M - excess cash (I'll use $178M cash net of minimum operating cash, call it ~$150M excess) ≈ $6.09B EV. That gives an earnings yield (EBIT/EV) of roughly 6.0%, which is decent but not screaming cheap — translates to an EV/EBIT of ~16.6x. On the quality side, ROIC in Greenblatt terms (EBIT / net working capital + net fixed assets): net working capital = current assets $394.7M - current liabilities $285.7M = $109M; net fixed assets (total assets $1,669M - current assets $394.7M - intangibles/goodwill not separately broken out in the fact base, but total liabilities $549.6M and equity $1,119M imply significant intangibles embedded; using reported ROIC proxy of 23.9% from fundamentals block as a cross-check). The stated ROIC of ~23.9% is strong for a healthcare services company, consistent with VITAS's asset-light hospice model and Roto-Rooter's established franchise network. FCF conversion is excellent: FCF $368M vs. operating income $366M, implying near 1:1 cash conversion — no earnings quality concern. The 24% FCF margin and 24% operating margin are structurally sound. The DCF fair value of $738/share vs. $463 current price implies ~59% upside, and the bear-case DCF ($554) still represents ~20% margin of safety. The price-to-FCF of 16.7x is attractive for a business with these returns. Key concerns: (1) The earnings yield of ~6% is acceptable but not a Magic Formula screamer (Greenblatt's sweet spot is 8-15%+ for strong buys). (2) The net income figure ($302K reported vs. $368M FCF) shows a massive divergence — this appears to be a GAAP anomaly (likely large depreciation/amortization, goodwill impairments, or deferred tax items) rather than true economic underperformance; the operating income of $366M is the right anchor. (3) Near-term headwinds: Roto-Rooter margin compression (EBITDA margins guided 21.5-22.5% vs. historical 25%+) and VITAS Medicare cap accruals ($28.2M in 2025) are real but management-characterized as temporary. (4) Q4 2025 earnings miss triggered a 15% drop; stock has partially recovered (+8.4% on Q1 2026 beat). The business is asset-light, has strong competitive moats (VITAS brand in hospice, Roto-Rooter's 85+ year national franchise network), generates abundant FCF, has minimal net debt (debt/equity 0.083), and trades at a moderate discount to intrinsic value on normalized earnings. This is a good-quality business at a fair-to-moderately-cheap price — squarely in Greenblatt's territory of above-average businesses at below-average prices, though not a statistical deep-value screamer.

Key points

EBIT/EV earnings yield ~6.0% (EV ~$6.09B, EBIT $366.5M) — decent but not exceptional; EV/EBIT ~16.6x
Reported ROIC of 23.9% reflects VITAS's asset-light hospice model and Roto-Rooter's franchise economics — genuinely high-quality capital deployment
FCF of $368M nearly matches operating income ($366M), confirming near-perfect cash conversion and no earnings quality distortion
Net debt is essentially zero (LT debt $92.5M vs. cash $178M), making EV cheapness straightforward with no leverage risk
DCF intrinsic value $738/share (bear case $554) vs. $463 current price — 20-59% margin of safety range
Revenue CAGR 6.7% over 3 years with 24% FCF margins; business has pricing power through Medicare reimbursement rates and Roto-Rooter's brand
Capital allocation discipline visible: active buybacks signaled by management, franchise bolt-on acquisitions ($20.6M San Francisco/Fort Worth, $12M Texas)
Q1 2026 beat and raised FY2026 guidance to $24.00-$24.75 adj. EPS suggests recovery narrative gaining traction

Red flags

Earnings yield of ~6% is on the lower end of Greenblatt's preferred range; not a statistical bargain on Magic Formula ranking alone
Massive GAAP net income anomaly ($302K reported vs. $368M FCF/$366M operating income) — requires normalization; fact base does not explain the gap clearly, reducing input reliability
VITAS Medicare cap risk ($28.2M 2025 accrual) is management-characterized as temporary but depends on Florida reimbursement rate differentials and admission mix — execution-dependent assumption
Roto-Rooter structural headwinds: Google search monetization shift (50% paid leads vs. 40% historical) is a secular cost pressure, not one-time; margin guided down to 21.5-22.5% from historical 25%+
Q4 2025 triple miss (EPS, revenue, guidance) suggests management had poor near-term visibility; two consecutive guidance cuts erode confidence in forward estimates
Intangible-heavy balance sheet (total assets $1.67B vs. tangible-looking components much lower) means Greenblatt ROIC denominator using net fixed assets + NWC would likely produce a MUCH higher ROIC — requires verification that returns aren't inflated by understated PP&E (hospice is largely people/relationships capital)
Director selling (1,347 shares in June 2026, 500 shares in May 2026) — modest but directionally negative insider signal during a recovery narrative

Bruce Greenwald — 🟢 pass · 74/100 · medium confidence

Chemed is a dual-segment business (VITAS hospice + Roto-Rooter) with a long operating history, stable-to-growing revenues, and genuine FCF generation — exactly the type of company where EPV analysis is meaningful. My EPV calculation: I normalize operating income at ~$366M (2024 operating income per filing), tax-affect at ~25% to get NOPAT of ~$275M. Add back excess depreciation over maintenance capex — capex is $49.5M vs D&A (estimated ~$60-70M based on OCF/NI spread), so modest add-back of ~$15M — yielding adjusted distributable earnings of roughly $290M. Capitalizing at WACC of 7% gives EPV ≈ $290M / 0.07 = $4.14B enterprise value. Adding net cash (~$86M) gives equity EPV ≈ $4.23B, or roughly $307/share on 13.77M shares. The current price of $463 is approximately 51% above my EPV estimate. The provided DCF at $738/share intrinsic value is heavily dominated by terminal value (81.9% of EV) and depends on sustained ~6.7% FCF growth — exactly the speculative growth assumptions I distrust. The margin of safety test FAILS at current price on a pure EPV basis. HOWEVER, the moat analysis matters here. VITAS has genuine barriers: (1) Certificate of Need regulations create regulatory moat with near-impossibility of new competitor entry in licensed geographies; (2) Referral network captivity — hospice is built on decades of physician, hospital, and social worker relationships that are genuinely expensive to replicate; (3) Medicare reimbursement expertise and compliance infrastructure. Roto-Rooter has a weaker but real moat: national brand recognition + 24/7 availability + geographic density in its markets creates customer captivity via search habit and trust, though Google's rising paid search cost is a genuine erosion of that distribution advantage. The reproduction value of these assets — brand built over decades, CON licenses, referral networks, national service infrastructure — is meaningfully above book equity (~$1.12B). EPV >> likely reproduction value for VITAS; EPV roughly at reproduction value for Roto-Rooter. This suggests VITAS is a genuine franchise where some premium is warranted. But the current price embeds significant growth value on top of EPV, which requires moat-protected growth to be justified. VITAS has the moat; Roto-Rooter is more contested. The Q4 2025 earnings miss, EPS guidance cuts, Roto-Rooter margin compression, and rising search marketing costs are near-term earnings power headwinds that argue for caution. On balance: the franchise quality supports a 'pass' at some price, but current price of $463 is materially above my EPV. The DCF bear case of $554 is more interesting and would represent modest margin of safety over EPV. At current price, an investor is paying substantially for growth — growth that is partially moat-protected (VITAS) but partially not (Roto-Rooter). I score this 74 — a lean pass reflecting real franchise value in VITAS but acknowledging the price is ahead of pure EPV, with a recommendation to buy closer to $380-420 where EPV + moderate moat premium would provide proper margin of safety.

Key points

EPV estimate ~$307/share ($290M normalized NOPAT / 7% WACC + net cash) — current price at 51% premium to EPV, requiring growth to justify
VITAS hospice has genuine, durable barriers to entry: CON licensing as regulatory moat, referral network captivity (physician/hospital relationships), Medicare compliance expertise — EPV well exceeds likely asset reproduction value, confirming franchise
Roto-Rooter moat weaker but real: national brand + 24/7 availability + geographic density create customer captivity, though Google paid search shift (now 50% of leads) is structural erosion of distribution advantage
Net cash balance sheet ($178M cash, $92.5M LT debt from 2022 period — effectively no net debt), strong FCF conversion (24% FCF margin) provides fortress balance sheet and supports capital allocation flexibility
FCF of $368M in 2024 at 16.7x price-to-FCF is not unreasonable, but normalizing earnings through the current VITAS cap accrual and Roto-Rooter margin compression cycle is critical before anchoring on this multiple
Provided DCF intrinsic value of $738 is 81.9% terminal value — classic speculative growth embedded; treat as ceiling, not anchor; bear DCF case of $554 is more credible and closer to my comfort zone

Red flags

Current price $463 is ~51% above my EPV of ~$307 — requires moat-protected growth to bridge the gap, which exists for VITAS but is not assured for Roto-Rooter
Roto-Rooter structural headwinds: Google's paid search dominance (50% of leads, rising cost per lead) is NOT a one-time problem — it is a permanent erosion of the low-cost distribution advantage that historically justified Roto-Rooter's margins
Net income anomaly: $302K net income reported vs $366M operating income implies massive below-the-line charges — requires normalization; GAAP EPS distorted, making earnings power analysis dependent on adjustments
EPS guidance cut ~11% in Q2 2025 ($24.95–$25.45 to $22.00–$22.30) signals management had poor near-term visibility — raises question of whether 'normalized' earnings are truly normalized or still cyclically elevated
DCF relies on 81.9% terminal value with 2.5% terminal growth and 7% WACC — modest WACC change or growth assumption change would swing intrinsic value dramatically; exactly the fragility I warn against
Director share sales (multiple open-market sells in May-June 2026) are a minor but noteworthy signal; not alarming individually but worth monitoring alongside operational headwinds

Charlie Munger — 🟢 pass · 74/100 · medium confidence

Chemed is a genuinely understandable dual-business holding company — VITAS (hospice) and Roto-Rooter (plumbing/drain services) — with decades of operating history and readable unit economics. The quality of both franchises is demonstrable: VITAS holds leading national hospice market share backed by Medicare reimbursement infrastructure and Certificate of Need barriers in key states; Roto-Rooter owns the most recognized brand name in residential plumbing/drain services with a national footprint that independents cannot replicate. These are not commodity businesses — they carry genuine switching-cost and brand-moat characteristics. The financial quality confirms the moat thesis: ROIC of 23.9% in 2024 far exceeds any reasonable cost of capital (WACC ~7%), operating margin of 23.9%, and FCF margin of 24% on $1.53B revenue. The balance sheet is fortress-grade — debt/equity of 0.08, $178M cash, net cash position, current ratio 1.38. The DCF intrinsic value of ~$738/share implies ~59% upside to the current $463 price, and even the bear case ($554) is comfortably above current price — this is a quality business trading at a meaningful discount to fair value, which is precisely the Munger sweet spot. The price-to-FCF of 16.7x is not cheap in isolation but is reasonable for a business with 24% FCF margins, 6.7% revenue CAGR, net cash, and defensive sector positioning (hospice demand is demographically inevitable, not cyclical). The earnings anomaly — net income of $302K vs. $368M FCF — is clearly an accounting artifact (likely large non-cash charges or write-downs in FY2024), NOT an earnings-quality concern; the cash is real. Management is candid: the Q2 2025 call explicitly acknowledged underperformance, detailed the Medicare cap mechanics clearly, and provided conservative 2026 guidance. Capital allocation is rational — modest buybacks, bolt-on M&A for Roto-Rooter franchises ($20.6M San Francisco/Fort Worth, $12M Texas counties), no empire-building. The inversion test: what kills this permanently? Structural Medicare hospice reimbursement cuts could pressure VITAS, but the demographic tailwind (aging population) makes meaningful reimbursement elimination politically improbable. Roto-Rooter faces Google search cost creep — a real but manageable headwind for a brand this strong. Neither threatens permanent impairment. Key risks keeping this from a higher score: (1) The net income figure ($302K GAAP vs. $368M FCF) needs explanation — likely large depreciation/amortization or one-time charges but the fact base doesn't fully clarify; (2) Roto-Rooter faces a genuine secular headwind from paid search monetization and private equity competition that management has not yet fully arrested; (3) VITAS Medicare cap risk in Florida is framed as temporary but depends on admission-mix execution the company has already stumbled on once; (4) The 52-week high discrepancy in the price block (high shown as $463.28 = current price, but fundamentals show $562.77 high) suggests CHE has fallen meaningfully from highs and the Q4 2025 15% earnings sell-off is real. Overall: high-quality, understandable, moated business at a fair-to-cheap price with honest management and a clean balance sheet. This is the kind of situation Munger would study patiently and likely hold for a decade.

Key points

ROIC of 23.9% substantially above WACC — classic evidence of durable economic moat in both hospice and plumbing services
FCF margin of 24.0% ($368M on $1.53B revenue) with net cash balance sheet; price-to-FCF of 16.7x is reasonable for this quality
DCF intrinsic value ~$738/share vs. $463 current price implies 59% upside; bear-case $554 still above market — genuine margin of safety
VITAS moat: Certificate of Need barriers, Medicare relationships, national scale, and demographic tailwind from aging population
Roto-Rooter moat: dominant brand recognition in residential services, national footprint, add-on service capability (water restoration, excavation) that franchisees cannot match
Management candor on Q2 2025 miss (cap crisis, labor/insurance issues) is a positive quality signal — no blame-shifting, clear mechanistic explanation
Capital allocation rational: net cash, bolt-on M&A at reasonable prices ($20-33M franchise acquisitions), no serial dilution
Revenue CAGR of 6.7% over 3 years with expanding FCF margin (20.8% in 2023 to 24.0% in 2024) suggests improving business quality

Red flags

GAAP net income of ~$302K vs. $368M FCF is a dramatic divergence requiring explanation — fact base does not fully clarify what drove this accounting anomaly in FY2024
Roto-Rooter Google search dependency (now 50% paid leads vs. 40% historical) represents a secular margin headwind that management acknowledges but has not structurally resolved
Florida Medicare cap risk: $28M 2025 accrual from reimbursement differential is framed as temporary, but management's admission-mix execution already disappointed once; structural Medicare policy changes remain tail risk
Stock fell ~18% from 52-week high ($562 to $463), including a 15% post-Q4 2025 earnings drop — market has materially re-rated this business downward; warrants understanding whether this is temporary or a signal
EPS guidance cut 11% at midpoint mid-2025 ($25.20 midpoint to $22.15) signals limited near-term forward visibility in both segments simultaneously
Director open-market share sales (1,347 shares by Andrea Lindell; 500 shares in May 2026) are modest but worth noting as a mild insider confidence signal

Michael Mauboussin — 🟢 pass · 74/100 · medium confidence

Chemed operates two businesses with very different moat profiles. VITAS (hospice) is the dominant segment: it earns ROIC of ~23.9% against a WACC of ~7%, a spread of roughly 1,700 bps — exceptional and well above the base rate for healthcare services companies. The spread is protected by genuine structural barriers: CON (Certificate of Need) licensing in many states acts as a regulatory moat, the hospice referral network generates switching costs for hospitals and skilled nursing facilities, and scale in a geographic market reduces per-patient administrative/nursing fixed costs. Roto-Rooter contributes a narrower moat — brand recognition and emergency-call dispatch scale — but faces eroding conditions (Google search monetization shifting economics, private equity competition, and lead-cost inflation). The key expectations-investing question: at $463/share and a P/FCF of ~16.7x, with the DCF suggesting ~59% upside to a $738 base-case intrinsic value, what must be true? The model uses 6.7% FCF growth and a 7% WACC — modest assumptions, not heroic. Even in the bear case ($554), there is ~20% upside. The market appears to be pricing in significant earnings risk (post-Q4 2025 15% sell-off, then partial recovery) without adequately weighing the durability of VITAS's ROIC spread. The GAAP net income figure (~$302K on $1.53B revenue) is almost certainly distorted by one-time items or accounting charges — operating income is $366M and FCF is $368M, which are the correct profitability anchors. The absurd P/E of 20,363x reflects this distortion, not economic reality. FCF yield at 16.7x P/FCF is ~6% — reasonable for a healthcare franchise. The Medicare cap issue in Florida is a genuine execution risk but management's framing is plausible: the rate differential between Florida and national reimbursement is the proximate cause, and the reserve-management approach for 2026 is conservative. The Roto-Rooter margin compression is more concerning structurally — the shift to paid search (50% of leads vs. 40% historical) represents a permanent cost structure change, not a one-time shock. Google's dominance in local search is a real, permanent headwind to Roto-Rooter's customer acquisition economics. The two-business structure creates a diversification benefit but also obscures where value is really being created: VITAS is the franchise; Roto-Rooter is the drag. Capital allocation is disciplined: D/E of 0.08, minimal debt, active buybacks signaled, and tuck-in M&A (Roto-Rooter franchise acquisitions at $12-21M each) at reasonable prices. The distribution of outcomes: VITAS recovery + stable Roto-Rooter = base case ($738 DCF); VITAS cap issues persist + Roto-Rooter structural decline = bear ($554); VITAS grows via CON awards + Roto-Rooter stabilizes = bull ($804+). The fat left tail is regulatory: any CMS hospice reimbursement reform or cap structure change would materially impair VITAS. This is the key disconfirming test to monitor.

Key points

ROIC of ~23.9% vs WACC of ~7% = ~1,700 bps spread; exceptional and materially above base rate for healthcare services
VITAS moat is real and mechanism-based: CON licensing (regulatory barrier), hospital/SNF referral network switching costs, and local market fixed-cost scale
FCF of $368M on $1.53B revenue = 24% FCF margin — high-quality cash generation; P/FCF of 16.7x implies ~6% FCF yield, undemanding for this ROIC profile
DCF implies 59% upside at base ($738) and ~20% even at bear case ($554) — embedded expectations appear too pessimistic relative to VITAS franchise durability
Capital allocation disciplined: near-zero net debt, tuck-in M&A at modest multiples, buybacks signaled — not empire building
GAAP net income distortion ($302K) is an accounting artifact; operating income ($366M) and FCF ($368M) are the correct economic anchors
Q1 2026 +8.4% earnings beat and raised guidance ($24.00-$24.75 adj. EPS) supports recovery narrative after Q4 2025 miss

Red flags

Roto-Rooter structural headwind: Google search monetization permanently raising customer acquisition cost (50% paid leads vs. 40% historical) — not a cyclical issue
Medicare cap risk is not fully resolved: Florida reimbursement rate differential could recur; management's 'zero cap in 2026' projection depends on admission mix and rate assumptions that are uncertain
VITAS EBITDA margin guided 17.5%-18.5% for 2026 vs. 19%+ historical — margin compression may be partly structural not just cap-related
Director insider selling (1,347 shares + 500 shares open-market) noted in recent months — modest but directionally negative
Roto-Rooter faces PE-backed competitors with scale and technology advantages in local services; market share trajectory unclear
82% of DCF value in terminal value is a large residual — modest changes to terminal growth or WACC assumptions significantly affect intrinsic value
Missing Q1 2026 and Q2 2025 transcript details limit confidence in management's execution on stated recovery initiatives

Ray Dalio — 🟢 pass · 72/100 · medium confidence

Chemed is a dual-business healthcare holding (VITAS hospice + Roto-Rooter plumbing/drain services) with a balance sheet that is effectively net cash, strong operating cash flow, and a business model partially anchored in non-discretionary, government-reimbursed healthcare demand. From a Dalio regime-robustness lens, CHE is meaningfully better than the average equity holding — but not exceptional. VITAS hospice demand is driven by demographics (aging population, death rates), which are nearly regime-agnostic; Medicare reimbursement provides an inflation escalator (annual rate updates) and is not credit-cycle dependent. This is the core diversification value: end-of-life care is non-discretionary and demand is structurally growing regardless of whether the economy is in boom, bust, or stagflation. The balance sheet is a significant positive: $178M cash, only $92.5M long-term debt (2022-period figure suggesting it may be mostly repaid), equity of $1.12B, and operating cash flow of $417M — net debt is effectively negative (~$86M net cash). This is the kind of fortress balance sheet that survives a 'beautiful deleveraging' cycle without accessing capital markets. FCF yield is attractive at ~6% (price-to-FCF of 16.7x), and ROIC of 23.9% is genuinely high. However, Roto-Rooter (~35-40% of revenues) is the regime vulnerability — it is a consumer-discretionary plumbing service exposed to housing activity, consumer confidence, and the credit cycle. As documented in Q2 2025, even a moderate consumer sentiment shock ('Liberation Day' tariffs) caused material revenue softness and 517bps margin compression. In a stagflation or deflationary deleveraging scenario, Roto-Rooter revenues could fall 10-20% and margin compression would be significant. The DCF shows intrinsic value of $738/share vs. $463 current price (59% upside), suggesting a substantial margin of safety — critically important from a Dalio risk lens because valuation cushion is what absorbs regime shocks. The WACC of 7% and terminal growth of 2.5% are reasonable, not heroic. Key risks: Medicare cap exposure in VITAS (structural Florida rate-differential risk that management frames as temporary but may recur); rising Google/paid-search cost dependency for Roto-Rooter (a structural margin headwind); and the fact that CHE is entirely US-domestic with no geographic diversification. Overall, CHE is a solid but not exceptional macro-resilient holding — strong balance sheet, partial regime immunity via hospice, but meaningfully cyclical on the Roto-Rooter side and with no international diversification.

Key points

VITAS hospice demand is demographically driven and Medicare-reimbursed — highly regime-agnostic; holds up in stagflation, deflationary bust, and boom alike
Net cash balance sheet (~$86M net cash, $417M operating cash flow) — no refinancing risk, no maturity wall, fully self-funding through any downturn
ROIC of 23.9% and FCF margin of 24% demonstrate genuine economic quality; not a credit-cycle beneficiary but an operator with pricing power via annual Medicare rate updates
DCF intrinsic value of $738/share at 59% upside provides meaningful margin of safety against regime shock — bear-case DCF of $554 still 20% above current price
Revenue CAGR of 6.7% over 3 years demonstrates consistent real-terms growth, supported by demographic tailwind not dependent on credit expansion
Roto-Rooter franchise acquisitions (San Francisco, Fort Worth, Texas counties) at modest prices ($20-32M) suggest disciplined capital allocation with no balance-sheet stretch

Red flags

Roto-Rooter (~35-40% of revenue) is cyclically exposed to consumer confidence and housing activity — showed material vulnerability to tariff shock in Q2 2025 with 517bps EBITDA margin compression
Zero geographic diversification — 100% US domestic revenue; exposed to USD reserve-currency deterioration and US-specific policy/regulatory risk
Medicare cap structure creates recurring tail risk for VITAS: Florida rate differential is not fully management-controllable and could recur in any year where Florida reimbursement growth outpaces national cap growth
Google paid-search structural shift (now 50% of leads vs. 40% historical) is a permanent inflation in Roto-Rooter's cost-per-lead — analogous to a fixed-price input cost increasing structurally
Net income of $301,999 (not $301M — appears to be thousands) vs. $367M FCF is an anomaly suggesting large GAAP charges; the P/E of 20,363x is uninvestable as stated — likely an accounting distortion but warrants investigation
Single-regime partial dependency: while VITAS is regime-robust, the blended entity still has meaningful earnings sensitivity to consumer slowdown and rate environment via Roto-Rooter's housing-adjacent demand

Forensic Short-Seller (Chanos/Einhorn-style) — 🟢 pass · 72/100 · medium confidence

From a forensic short-seller perspective, Chemed (CHE) actually presents a surprisingly clean accounting picture that fails most of the classic short-sale criteria. Operating cash flow ($417.5M) materially EXCEEDS net income ($302K GAAP, but the near-zero net income is a GAAP artifact — operating income is $366.5M, suggesting a large non-cash or below-the-line charge distorting net income). Free cash flow ($368M) is robust and consistent. The earnings-vs-cash divergence test — the core Chanos/Einhorn test — runs in the WRONG direction for a short: cash is beating reported GAAP earnings, not lagging them. The anomalous near-zero net income ($302K vs $366.5M operating income and $417.5M CFO) warrants scrutiny — this gap likely reflects interest expense, tax provisions, or acquisition-related charges — but even so, the cash generation is clearly real. Historical FCF has been consistently positive across 5 years ($250M-$430M range). The balance sheet is conservative: debt-to-equity of 0.083, long-term debt only $92.5M against $178M cash (net cash position), current ratio 1.38. There is no debt wall. Insider selling is present (director sold 500 shares, another sold 1,347 shares) but these are small transactions, not the clustered Form 4 avalanche that signals distress. The two genuine forensic concerns are: (1) the near-zero GAAP net income vs. strong operating income — something is consuming ~$366M of operating income before reaching net income; this gap needs explanation from the 10-K notes (likely stock-based comp, depreciation/amortization on acquired intangibles, or a large one-time below-the-line item); (2) Medicare cap accrual mechanics at VITAS — a $28.2M cap accrual in 2025 is a revenue contra-entry that could be manipulated; management's assertion it goes to zero in 2026 is a key falsifiable claim. The Roto-Rooter paid-search shift (from 40% to 50% of leads at higher cost) is a structural margin headwind that management is attributing to temporary tariff effects — this is the classic promotional management deflection Chanos watches for. But overall, the accounting quality is high, cash conversion is real, and the business is not financing-dependent.

Key points

FCF ($368M) and OCF ($417M) both substantially exceed any reasonable operating earnings measure — cash quality test passes cleanly, the OPPOSITE of a short setup
Net income near-zero ($302K GAAP) vs $366.5M operating income is a large and unexplained gap that warrants investigation of below-the-line charges in 10-K notes (likely intangible amortization + tax items)
5-year FCF history is consistent and positive: $430M, $250M, $253M, $273M, $368M — no FCF fabrication pattern
Balance sheet is fortress-like: $92.5M LT debt vs $178M cash, debt/equity 0.083, no refinancing risk, no debt wall
Medicare cap accrual ($28.2M in 2025) is a key falsifiable management claim — they project zero in 2026; if this recurs, it signals either revenue recognition aggression or structural reimbursement risk at VITAS
Roto-Rooter margin compression attributed to 'tariff shock' and 'insurance actuarial hit' — classic management deflection language; Google organic-to-paid shift is likely structural, not temporary
Insider selling is present but modest (1,347 + 500 shares) relative to market cap; not a cluster signal
Price-to-FCF of 16.7x is reasonable for the cash quality; DCF intrinsic value $738 vs $463 price suggests the market is already pricing in significant risk

Red flags

GAAP net income of $302K vs operating income of $366.5M is a ~$366M gap requiring explanation — likely intangible amortization and taxes from acquisitions, but this must be verified in 10-K notes; if it reflects recurring non-cash charges excluded from 'adjusted' metrics, it is a non-GAAP reliance red flag
Q4 2025 EPS miss of 8.55% and 15% stock drop, followed by management's 11% EPS guidance cut, suggests poor forward visibility and possible management overclaiming in prior quarters
Medicare cap mechanism at VITAS is complex and subject to management estimation — $28.2M contra-revenue accrual that management projects will go to $0 in 2026 is a binary claim; if wrong, it would represent material earnings quality risk
Roto-Rooter paid-search cost inflation (now 50% of leads vs 40% historical) is framed as temporary but is likely structural — Google's algorithm changes are not reversible; this is a secular margin headwind management is not fully acknowledging
No 10-K/10-Q full text available in filings excerpts — SEC filing sections are XBRL tags only, preventing direct verification of revenue recognition policies, unbilled receivables, goodwill impairment risk, or notes on below-the-line charges

AI & Disruption Referee (Christensen-style) — 🟢 pass · 72/100 · medium confidence

Chemed operates two distinct businesses — VITAS (hospice care) and Roto-Rooter (plumbing/drain services) — and the AI/disruption lens must be applied separately to each, then synthesized. Neither business is a digital intermediary or knowledge-work aggregator in the classic disintermediation mold, which immediately reduces the acute commoditization risk. However, both have meaningful AI exposure worth stress-testing.

VITAS (Hospice) — AI impact: Modest tailwind, low obsolescence risk. Hospice care is fundamentally a high-touch, hands-on human service. The core job-to-be-done is physical bedside care, pain management, emotional support for dying patients and families, and care coordination. AI cannot replace the registered nurse, aide, or chaplain at the bedside. Where AI is a genuine threat is in the referral/intake optimization layer: AI-driven care management platforms (e.g., Abridge, Navina, Cohere Health) could theoretically help hospital systems route hospice referrals more efficiently, reducing dependence on VITAS's relationship-driven sales force. However, VITAS's moat is not in matching — it is in licensed facilities, CON (Certificate of Need) regulations in 36 states, Medicare-certified provider status, and scale in care delivery. These are regulatory and operational barriers AI cannot replicate. AI applied internally (predictive admission planning, acuity scoring, documentation automation) is more likely a tailwind — reducing nurse administrative burden and improving census management. The Medicare cap problem is fundamentally a regulatory/reimbursement design issue, not an AI story. Net: AI is a modest internal efficiency tailwind for VITAS; no meaningful disintermediation risk.

Roto-Rooter — AI impact: Moderate threat, one specific mechanism matters. The plumbing and drain-service business is primarily skilled-trade labor dispatched to physical locations. AI cannot unclog a drain or replace a water heater. The obsolescence risk is low on the physical delivery side. However, one specific mechanism is already visible and flagged explicitly in management's own commentary: the shift in customer acquisition from organic search to paid search (now ~50% of leads), driven by Google's monetization of search results and AI-generated summaries (SGE/AI Overviews) crowding out organic results. This is the Christensen mechanism — a platform owner (Google) capturing value that previously accrued to Roto-Rooter's brand/SEO position. If AI Overviews increasingly answer 'who to call for drain service' with Google's own Local Services Ads or AI-suggested alternatives, Roto-Rooter's cost-per-lead rises and its historical organic-search moat (brand recognition in search) erodes. This is not hypothetical — management explicitly cited rising paid-search dependency as a structural margin headwind in 2025. The bear case is that Google's AI search integration permanently raises Roto-Rooter's customer acquisition cost, compressing margins by 100-200 bps structurally. On the other hand, Roto-Rooter's brand (near-universal household recognition) and franchise network provide resilience that a generic Google Local listing cannot replicate. Water restoration and excavation services are harder to commoditize via search optimization.

Synthesis: CHE is not an AI obsolescence story. The primary businesses are physically grounded in ways that resist digital substitution. The one real AI-linked risk — Google's search AI crowding out organic discovery for Roto-Rooter — is real and already showing up in financials (margin compression, higher marketing costs), but it is a margin headwind, not an existential threat. Management acknowledges the search-marketing shift explicitly, which is a credit point for honesty. There is no evidence of AI-native competitors displacing VITAS on care delivery or Roto-Rooter on job execution. The hyperscaler capture risk is limited to the customer-acquisition layer for Roto-Rooter. Internally, AI offers genuine tailwinds in documentation, scheduling, and care coordination. Score 72 — passes on disruption grounds, with one specific watch item (Google search AI → Roto-Rooter CAC inflation) that warrants monitoring but does not constitute a Christensen-style displacement.

Key points

VITAS hospice is physically grounded high-touch care; AI cannot substitute bedside clinical and emotional labor; CON regulations and Medicare certification are non-replicable by technology
AI applied internally to VITAS (predictive ADC modeling, documentation automation, acuity scoring) is a genuine cost-side tailwind that could improve census management and cap risk mitigation
Roto-Rooter's physical job execution (drain cleaning, plumbing repair, water restoration) has no AI substitution risk — skilled trade labor dispatched to homes cannot be automated away
The specific AI threat to Roto-Rooter is Google's search AI (AI Overviews/SGE) displacing organic search results, raising paid-search dependency already confirmed at ~50% of leads — a real margin headwind
Management explicitly acknowledges the search-marketing structural shift, which is an honesty credit; they are not treating AI purely as a feature/tailwind with no downside acknowledgment
No AI-native competitors identified in either hospice or plumbing services that are materially underpricing or disintermediating CHE's core delivery
The falsifiable bear signal: Roto-Rooter cost-per-lead continuing to rise 10%+ annually with organic search share declining further as Google AI Overviews expand — watch 2026-2027 marketing-cost-as-%-of-revenue trend
The falsifiable bull signal: VITAS deploying AI-assisted documentation/scheduling that expands nurse capacity per patient, improving ADC without proportionate headcount cost growth

Red flags

Google's AI search integration (AI Overviews) is a real platform-capture mechanism already compressing Roto-Rooter organic search share — management confirmed paid search rose from ~40% to ~50% of leads, a leading indicator of structural CAC inflation
Roto-Rooter's historical brand/SEO moat in local search — a key demand-generation asset — is being eroded by a well-capitalized hyperscaler (Google) with no compensating response visible beyond spending more on paid search
If Google expands AI-native home-services booking (similar to how it absorbed travel/hotel booking), Roto-Rooter's consumer brand could face disintermediation at the top of the funnel even without any AI in its own operations

Warren Buffett — 🟡 watch · 62/100 · medium confidence

Chemed is a genuinely understandable dual-business: VITAS (hospice care) and Roto-Rooter (plumbing/drain services). Both segments have identifiable competitive advantages — VITAS benefits from regulatory barriers (CON licenses, Medicare certifications, established referral networks), while Roto-Rooter owns the most recognized brand in residential plumbing services in North America. These are real moats. The businesses are capital-light relative to revenues (capex only $49M on $1.53B revenue, FCF margin ~24%), and the balance sheet is essentially fortress-like: only $92.5M long-term debt against $1.12B equity and $178M cash, giving a near-zero debt-to-equity of 0.08. Operating cash flow ($417M) dwarfs capex decisively. ROIC of 23.9% is excellent. However, several things concern me. First, net income of $301,999 — that is not millions, that appears to be hundreds of thousands — is strikingly anomalous against $366M operating income and $368M FCF; this signals a large non-cash or one-time charge distorting GAAP earnings and creating the absurd P/E of 20,363. The fact base does not explain this adequately. Second, the quality of recent earnings has deteriorated: 2025 EPS guidance was cut 11% mid-year, Q4 2025 missed badly causing a 15% stock drop, and both segments face structural headwinds (Florida Medicare cap at $28M, Roto-Rooter's rising paid-search dependency as organic leads erode). Third, ROE is reported as 0.03% — again, this reflects the net income anomaly, not the true earning power of the business, which the $368M FCF better represents. On normalized owner earnings (using FCF), the business trades at ~16.7x FCF, which is reasonable but not cheap given the current execution stumbles. The DCF intrinsic value of $738/share implies 59% upside from $463, and even the bear case of $554 suggests margin of safety exists — but the DCF relies on 6.67% FCF growth sustained for 5 years, which requires both VITAS cap recovery AND Roto-Rooter margin stabilization. Management's candor on the Q2 2025 call is a positive (they clearly articulated the Florida reimbursement differential as the root cause), and the capital allocation philosophy (buybacks, disciplined M&A) appears sound. But I require seeing the recovery actually materialize — the 'show me' nature of this story is real. This is a good business temporarily impaired, not a permanently impaired one, but at this moment it sits between 'fair price for a good business' and 'fair price for a business in a wobbly phase.'

Key points

VITAS hospice has durable competitive moat via CON licenses, Medicare certification, and entrenched referral networks — genuine regulatory and operational barriers to entry
Roto-Rooter is the dominant brand in residential drain/plumbing services with strong consumer recognition; brand moat is real though facing digital marketing headwinds
Capital-light economics: $49M capex on $1.53B revenue; FCF margin ~24%; ROIC 23.9% — all consistent with a high-quality business
Balance sheet is fortress-like: $92.5M long-term debt, $178M cash, D/E of 0.08 — can self-fund through downturns and pursue opportunistic buybacks/M&A
Price-to-FCF of 16.7x is reasonable for the quality level; DCF base case of $738/share implies meaningful margin of safety if normalized earnings recover
Management demonstrated candor on Q2 2025 call in diagnosing Florida Medicare cap differential and Roto-Rooter labor/insurance misalignment — a positive governance signal
Q1 2026 beat and raised guidance ($24.00-$24.75 adjusted EPS) suggests recovery trajectory is beginning

Red flags

GAAP net income of $301,999 (not millions) vs $366M operating income is deeply anomalous and unexplained in the fact base — requires understanding before full conviction
2025 EPS guidance cut ~11% mid-year and Q4 2025 caused 15% stock drop: management visibility into forward earnings appears impaired, a concern for predictability
Florida Medicare cap ($28M accrual in 2025) is framed as temporary but depends on reimbursement rate differentials and admission mix — structural risk not fully eliminated
Roto-Rooter organic search erosion (paid leads now 50% vs 40% historically) is a structural shift in Google's ecosystem, not a temporary tariff shock — cost per lead will likely keep rising
Revenue CAGR of 6.7% over 3 years is modest; historical revenue declined from 2020 to 2022 before recovering, suggesting cyclical sensitivity greater than a pure moat business would exhibit
Director selling (two instances in May-June 2026) warrants monitoring though not alarming at current levels
DCF terminal value represents 81.9% of enterprise value — highly sensitive to terminal growth assumption; modest assumption error could significantly reduce intrinsic value

Terry Smith (Fundsmith) — 🟡 watch · 62/100 · medium confidence

Chemed is a dual-business holding company (VITAS hospice + Roto-Rooter plumbing services) that passes several Fundsmith quality screens but fails others in meaningful ways. On the positive side: operating margins are substantial at ~24%, FCF conversion is excellent (FCF of $368M vs operating cash flow of $417M on $1.53B revenue, giving a ~24% FCF margin), capital intensity is genuinely light (capex only $49.5M or 3.2% of revenue), ROIC is reported at 23.9% which clears the 20%+ bar, the balance sheet is effectively net-cash (long-term debt $92.5M vs cash $178M), and price-to-FCF of 16.7x is a reasonable entry multiple for a quality business. The DCF base case of $738 implies ~59% upside, and even the bear case ($554) is above current price. However, serious Fundsmith red flags are present. First, the anomalous net income figure ($302K GAAP net income vs $368M FCF) signals significant non-cash or below-the-line distortions — this level of GAAP/FCF divergence requires explanation and undermines confidence in reported earnings quality. Second, the business is neither a pure consumer staple nor a recurring-subscription model: VITAS is Medicare-reimbursed (regulatory/cap risk demonstrated by the $28M 2025 Florida Medicare cap accrual) and Roto-Rooter is discretionary/semi-discretionary residential services with demonstrated cyclicality. Third, the earnings trajectory is troubled — Q4 2025 missed by 8.55%, full-year 2025 EPS guidance was cut 11% from $25.20 midpoint to $22.15 midpoint, margins are compressing in both segments (VITAS EBITDA guided 17.5-18.5% vs 19%+ historically; Roto-Rooter 23.5-24.5% vs 25%+ historically), and Google search dependency is structurally eroding Roto-Rooter's customer acquisition economics. Fourth, revenue CAGR of 6.7% over 3 years is modest and actually masks a period of revenue decline (2020-2022 saw revenue fall from $1.335B to $1.202B before recovering). The Roto-Rooter segment faces genuinely structural headwinds from PE-backed competition and Google monetization, not merely cyclical noise. Fundsmith would appreciate the asset-light model and FCF generation but would be troubled by the regulatory dependence of VITAS, the structural deterioration in Roto-Rooter's moat, the mysterious GAAP earnings anomaly, and the lack of the kind of durable pricing power typically found in the best Fundsmith holdings. This is a 'watch' rather than a 'pass' — the FCF yield is attractive and the balance sheet is clean, but quality of earnings and moat durability are below the Fundsmith bar for conviction.

Key points

FCF margin of 24% and price-to-FCF of 16.7x represent attractive cash economics for a quality-adjacent business
ROIC of ~24% clears the 20%+ Fundsmith threshold, and capex intensity is genuinely low at 3.2% of revenue
Net-cash balance sheet (LTD $92.5M vs cash $178M) eliminates leverage risk — a key Fundsmith requirement
DCF intrinsic value of $738 (base) implies meaningful margin of safety even at bear case $554 vs current $463
Revenue CAGR of 6.7% is modest but positive; VITAS structural tailwind from aging demographics is durable
Q1 2026 beat and guidance raise to $24.00-$24.75 suggests 2025 trough may be passing

Red flags

GAAP net income of ~$302K versus FCF of $368M is a severe and unexplained divergence — earnings quality concern
Medicare cap risk is structural, not one-time: $28M 2025 accrual shows regulatory dependence creates lumpy, hard-to-model earnings
Roto-Rooter moat is eroding: Google search monetization permanently raising CAC (paid search now 50% of leads vs 40% historically), PE competition intensifying
Margin compression in both segments from historical peaks — VITAS from 19%+ to guided 17.5-18.5%; Roto-Rooter from 25%+ to 23.5-24.5%
11% EPS guidance cut in Q2 2025 and 15% stock decline post-Q4 2025 miss signal management visibility and execution quality below Fundsmith standards
Roto-Rooter discretionary demand exposure (plumbing/drain cleaning) is cyclically sensitive — demonstrated in 2025 consumer pullback

Chuck Akre — 🟡 watch · 58/100 · medium confidence

Chemed Corp is a dual-business holding company (VITAS hospice + Roto-Rooter plumbing services) with genuinely attractive FCF economics but significant concerns across all three legs of the stool. The business does generate strong free cash flow ($368M FCF on $1.53B revenue = 24% FCF margin), and ROIC at 23.9% clears my 20%+ bar impressively. But the picture is muddied by a near-zero reported net income ($302K on $1.53B revenue) that is almost certainly a GAAP accounting artifact — operating income was $366M and operating cash flow $418M, so the accounting distortion (likely large non-cash charges or one-time items) is real but opaque without full 10-K detail. This is a yellow flag on transparency rather than a red flag. On the three-legged stool: (1) The business quality is real but mixed — VITAS has genuine franchise characteristics in a structurally growing hospice market (aging demographics, underpenetration), while Roto-Rooter is a solid brand but faces structural headwinds from Google's search monetization shift raising customer acquisition costs, private equity competition, and declining organic leads. Neither is a pristine franchise. (2) Management demonstrated both skill (20%+ ROIC, strong FCF conversion, disciplined low leverage at 0.08x D/E) and a troubling miss cycle — Q4 2025 EPS missed by 8.5%, full-year 2025 guidance was cut 11% mid-year from ~$25 to ~$22, and the Q2 2025 earnings call revealed management was caught flat-footed by Florida Medicare cap dynamics they should have modeled earlier. Q1 2026 beat and raised guidance to $24.00-$24.75 is encouraging but 'show me' credibility is damaged. Roto-Rooter margin compression (517 bps YoY in Q2 2025) with excuses (tariff shock, insurance actuarial hits, labor misalignment) is not what I want to see from a franchise operator. (3) Reinvestment runway: VITAS has a genuine long runway — hospice penetration remains low, aging demographics are a multi-decade tailwind, and new CON market awards (Pinellas County) provide organic expansion opportunities. Roto-Rooter's runway is less clear; franchise consolidation via M&A (paying $20-32M for market acquisitions) is sensible but modest in scale. The DCF intrinsic value of $738/share vs. current $463 implies 59% upside — at a 16.7x price-to-FCF multiple this is not expensive for the FCF quality. The valuation is actually attractive by Akre standards — I'd normally be comfortable paying 20-25x FCF for a genuine compounder, and at 16.7x there is a margin of safety. However, I'm scoring this as 'watch' rather than 'pass' because: the management credibility damage from the 2025 miss cycle needs to be rebuilt, the Roto-Rooter structural headwinds (Google dependency, PE competition) are genuinely uncertain, the GAAP net income anomaly needs explanation, and the dual-business structure means neither business gets full capital allocation focus. I want to see 2-3 quarters of execution on the 2026 guidance before committing.

Key points

ROIC of 23.9% and FCF margin of 24% clear my 20%+ return threshold — genuine business quality evidenced without heavy leverage (D/E of 0.08x)
VITAS hospice has a compelling multi-decade reinvestment runway: aging demographics, low hospice penetration rates, CON market expansion (Pinellas County award), and Medicare reimbursement tailwinds
FCF-to-price yield is attractive at ~6% (price-to-FCF 16.7x); DCF intrinsic value of $738 implies 59% upside — reasonably priced for the quality level
Revenue CAGR of 6.7% over 3 years is modest but consistent; FCF compounding from $430M (2020) to $368M (2024) shows some regression but 2024 recovered strongly from 2021-2023 trough
Balance sheet is pristine: $178M cash, $92.5M long-term debt, net cash position — capital allocation flexibility for buybacks and M&A without leverage risk
Q1 2026 beat and raised FY 2026 guidance to $24.00-$24.75 EPS suggests the 2025 miss cycle may be inflecting positively

Red flags

GAAP net income of $302K on $1.53B revenue is almost certainly an accounting distortion but is opaque without full 10-K detail — operating income was $366M and OCF was $418M, so the disconnect is extreme and needs explanation
Management credibility damaged: FY2025 EPS guidance was cut 11% mid-year ($25 midpoint to $22.15 midpoint); Q4 2025 missed by 8.5%; Florida Medicare cap mismanagement suggests inadequate financial modeling rigor
Roto-Rooter faces structural headwinds: Google's search monetization shift has moved paid search from 40% to 50% of leads with rising cost-per-lead — this is not a one-time tariff shock but a secular compression on unit economics
Director selling: Two separate directors sold shares (500 and 1,347 shares) in May-June 2026, a modest but notable signal when management credibility is already under scrutiny
FCF per share compounding is impaired: with only 13.8M shares outstanding, the buyback program needs to be more aggressive to drive per-share value compounding; limited color on buyback pace from available materials
VITAS Medicare cap exposure is a recurring regulatory risk — the Florida reimbursement rate differential vs. national cap creates a structural vulnerability that management acknowledges could repeat if rate differentials persist

Seth Klarman — 🟡 watch · 58/100 · medium confidence

CHE presents a genuinely interesting but imperfect value setup. The DCF intrinsic value of $738/share vs. a current price of $463 suggests ~59% upside and a meaningful discount to a base-case estimate. However, my discipline requires stress-testing that discount rather than accepting it. The DCF relies on 6.67% FCF growth (using revenue CAGR as a proxy) and an 81.9% terminal value weight — meaning the vast majority of the computed value rests on assumptions about the future, not hard assets today. That is structurally uncomfortable from a margin-of-safety standpoint. On the positive side: the balance sheet is genuinely clean. Total liabilities of $550M vs. total assets of $1.67B; long-term debt of only $92.5M (and the net-debt position is actually net cash of ~$86M per valuation block); current ratio of 1.38; operating cash flow of $417M dwarfs capex of $49.5M. FCF yield at current price is ~6% (price-to-FCF of 16.7x), which is reasonable but not screaming cheap. Operating margin of 23.9% and ROIC of 23.9% suggest a high-quality business. The normalized FCF of ~$368M on a $6.15B market cap is real cash generation, not accounting fiction. However, the margin-of-safety concern is sharpened by several factors: (1) the Q4 2025 15% earnings miss followed by guidance cuts signals management visibility is poor — a Klarman red flag on management credibility and disclosure quality; (2) the Medicare cap issue in VITAS ($28.2M 2025 accrual) represents a recurring regulatory risk that management characterizes as temporary but which has structural roots in Florida reimbursement differentials; (3) Roto-Rooter faces secular headwinds from Google's search monetization shift (paid search now 50% of leads vs. 40% historical) — this is not obviously temporary and could compress margins permanently; (4) the GAAP net income of $302K on $1.53B revenue is anomalously low (net margin of 0.02%), almost certainly reflecting non-cash or one-time charges that distort the picture — the operating income of $366M and FCF of $368M tell a healthier story, but the discrepancy warrants scrutiny; (5) the stock is sitting at its 52-week high per the price block (though the fundamentals block shows 52-week range of $365-$563, suggesting the current price of $463 is mid-range, not at a multi-year low). The bear scenario of $554 in the sensitivity analysis still offers ~20% upside from current price, which provides a modest but real margin of safety even in a stress case. The company is not distressed, not a special situation per se, but the combination of a regulatory/operational stumble creating a temporary dislocation, a clean balance sheet, and real FCF generation at a 6% yield puts this in 'watch' territory. I would want to see the Q4 2025 and Q1 2026 results in full before committing capital, particularly to validate whether the Medicare cap issue is truly receding and whether Roto-Rooter's margin is stabilizing. The 11% EPS guidance cut from Q2 2025 and the missing Q1 2026 transcript are meaningful gaps in my information set. At a price closer to $400 or below, closer to the bear-case DCF of $554 still offering 35%+ upside, this would be more compelling as a classic Klarman 'fallen quality' setup. At $463, the discount exists but is not yet large enough relative to the uncertainty and the weight of the thesis on terminal value assumptions.

Key points

DCF intrinsic value of $738/share implies ~59% upside; even bear-case DCF of $554 implies ~20% upside — real discount exists but not yet deeply asymmetric
Balance sheet is a genuine strength: net cash position (~$86M net cash), only $92.5M long-term debt, $418M operating cash flow, current ratio 1.38 — downside floor is real
FCF of $368M on $6.15B market cap = ~6% FCF yield (P/FCF 16.7x) is reasonable quality-adjusted value but not screaming cheap
ROIC of 23.9% and operating margin of 23.9% confirm high-quality underlying economics in both VITAS and Roto-Rooter
Medicare cap issue ($28.2M 2025 accrual) framed as temporary by management; Q1 2026 guidance raise to $24.00-$24.75 EPS supports recovery narrative
Roto-Rooter franchise acquisitions ($20.6M San Francisco/Fort Worth; $12M Texas) signal continued reinvestment discipline at reasonable prices
Revenue CAGR of 6.7% over 3 years provides modest but real organic growth engine — not a purely stagnant value name

Red flags

DCF value is 81.9% terminal value — intrinsic value estimate is heavily dependent on perpetuity assumptions, not hard asset coverage; conservative Klarman methodology would apply significant haircut
Q4 2025 miss (15% stock drop) and 11% EPS guidance cut from Q2 2025 earnings call signal management had poor forward visibility — undermines confidence in current guidance
GAAP net income of $302K vs. $366M operating income is a massive unexplained discrepancy that warrants scrutiny before capital commitment — potential for hidden charges or accounting complexity
Medicare cap risk is structurally tied to Florida reimbursement differentials — management calls it temporary but the rate spread that caused it could persist
Roto-Rooter's Google search dependency (50% paid leads, rising cost per lead) is a secular headwind, not a cyclical one — permanent margin compression risk
Multiple insider sells reported (director sold 1,347 shares June 2026, director sold 500 shares May 2026) — not catastrophic but directionally negative signal
Information gaps: Q4 2025 full transcript unavailable, Q1 2026 transcript unavailable — cannot independently validate recovery narrative management is telling

Howard Marks — 🟡 watch · 58/100 · medium confidence

CHE presents a genuinely interesting risk/reward setup from a Marks framework perspective, but it sits in the middle ground — not cheap enough to be a clear contrarian buy, yet not so expensive or fragile as to be an obvious avoid. The DCF suggests ~59% upside to intrinsic value ($738 base vs. $463 current price), which is meaningful, but the quality of that estimate depends heavily on assumptions that carry real execution risk. The price is 18% below the 52-week high ($562), and the stock fell 15% post-Q4 2025 earnings — there is genuine fear in the price. Retail sentiment is bearish-to-mixed, and the narrative is one of disappointment and 'show me.' These are the conditions Marks looks for. However, the bull case requires specific recoveries: (1) Medicare cap normalization in Florida to zero by 2026, (2) Roto-Rooter margin recovery as insurance costs stabilize and search leads normalize, and (3) continued VITAS ADC growth. This is not 'priced for catastrophe' — it is priced for a cyclical trough with recovery embedded, which is different. The balance sheet is genuinely strong: net cash position (cash $178M vs. long-term debt $92.5M = net cash ~$86M), debt-to-equity of 0.08, current ratio 1.38, and operating cash flow of $417M on ~$1.53B revenue. No refinancing risk, no covenant stress, no leverage trap. This is the kind of structure that survives bad scenarios — Marks's first requirement. FCF yield of ~6% (price-to-FCF 16.7x) on a stable, defensible business is reasonable but not screaming cheap. The ROIC of 23.9% and FCF margin of 24% signal a high-quality compounder, but quality alone does not satisfy the Marks framework — what matters is what you pay. At 4x sales and ~16.7x FCF, CHE is not bargain-priced. The gap between the 52-week high and current price does reflect some capitulation, and the Q1 2026 beat (+8.4% pre-market) suggests the worst may be priced in for VITAS. But the Roto-Rooter structural headwinds — Google search monetization permanently raising cost-per-lead, declining organic visibility, PE competition in drain cleaning — are not clearly temporary. Management's 'Liberation Day tariff shock' explanation for April-May weakness is plausible but unverified. The PEG ratio is absurdly distorted (3052x) because GAAP net income of $302K on $1.53B revenue suggests a one-time charge or accounting anomaly crushing reported earnings — this deserves a red flag. Net income of $302K vs. operating income of $366M is a massive divergence that the fact base does not explain clearly. Operating cash flow of $417M vs. net income of $302K further confirms something is distorted in GAAP earnings (likely non-cash charges, write-downs, or tax items). This opacity makes it harder to assess true earnings power with confidence. On the cycle: healthcare services (hospice) is largely non-cyclical — death and aging demographics are not economically sensitive. Roto-Rooter is moderately cyclical, but essential plumbing services have limited discretionary delay. CHE is not a late-cycle momentum play. The second-level question: consensus has punished CHE for 2025 misses and now prices in continued mediocrity. If VITAS cap truly normalizes to zero and Roto-Rooter stabilizes, 2026 adjusted EPS guidance of $24.00-$24.75 implies a forward P/E of roughly 18-19x on adjusted earnings — not cheap, but not expensive for a healthcare compounder with strong FCF. The watch verdict reflects genuine interest but insufficient cheapness to be a strong buy: the margin of safety is present but not wide, the recovery thesis is plausible but requires execution on multiple fronts, and the GAAP earnings distortion deserves investigation before conviction.

Key points

Net cash balance sheet (cash $178M vs. long-term debt $92.5M) eliminates financing/survival risk — this clears Marks's primary 'survive the downturn' test
FCF of $368M on $1.53B revenue (24% FCF margin) with price-to-FCF of 16.7x provides reasonable but not screaming-cheap yield for a defensible healthcare/services franchise
Stock is ~18% below 52-week high, fell 15% post-Q4 2025 earnings, retail sentiment bearish-to-mixed — some fear priced in but not full capitulation/revulsion
DCF intrinsic value $738 (base case) vs. $463 price = 59% upside; even bear case of $554 implies 20% upside from current — asymmetry favors buyer if assumptions hold
VITAS Medicare cap normalization in 2026 (management projects zero Florida cap) is credible given structural explanation, and the $19M hit was explicitly one-year rate-differential anomaly
ROIC 23.9%, operating margin 23.9%, and consistent FCF generation across economic cycles (2020-2024) demonstrate durable franchise economics in hospice and essential services

Red flags

GAAP net income of $302K vs. operating income of $366M is an extreme divergence — something material is suppressing reported earnings and the fact base does not explain it; this opacity risks hidden liabilities or accounting charges
Roto-Rooter faces structural headwinds (Google paid search now 50% of leads, rising cost-per-lead, PE competition in drain cleaning) that management frames as temporary but may be permanent — classic 'risk mistaken for noise'
Recovery thesis requires simultaneous execution on three fronts (VITAS cap normalization, Roto-Rooter margin recovery, CON market ramp-up) — dependence on multiple things going right reduces margin of safety
At 4.0x sales and ~16.7x FCF, CHE is not priced for catastrophe — it is priced for a trough with recovery assumed, which means the 'low expectations bar' is not as low as the headline narrative suggests
Director selling (1,347 shares by Andrea Lindell; 500 shares in open-market trade) while stock is near 52-week lows is a mild negative signal
Medicare cap risk is structurally tied to Florida reimbursement rate premium over national cap growth — if Florida inflation remains elevated (as management acknowledges is possible), the 2026 'zero cap' projection could repeat the 2025 miss pattern

Benjamin Graham — 🟡 watch · 52/100 · medium confidence

Chemed Corporation presents a mixed picture under Graham's criteria. On the positive side, the business is a large, established, profitable enterprise with a genuine track record spanning multiple years, positive free cash flow throughout the observed history, and a conservatively leveraged balance sheet with minimal long-term debt ($92.5M) relative to total equity ($1.12B). The DCF intrinsic value of $738 per share versus a current price of $463 implies a meaningful upside (~59%), and even the bear-case DCF scenario of $554 offers a margin of safety. FCF yield (price-to-FCF of 16.7x) is reasonable and the operating margin at 23.9% is strong. However, several Graham criteria raise serious concerns. The current ratio of 1.38 falls well short of the 2.0 minimum Graham required, and current assets ($394.7M) do not approach twice total liabilities ($549.6M). The stock is not a net-net by any measure; price-to-book of 5.5x is elevated. The P/E multiple appears astronomically distorted (20,363x) due to what appears to be a near-zero GAAP net income of $301,999 in 2024 — this is deeply anomalous given strong operating income of $366M and FCF of $368M, suggesting large non-cash charges or unusual items that require explanation not fully provided in the fact base. This GAAP/operating income divergence is a material red flag that demands scrutiny before capital is committed. Earnings stability over the decade appears positive at the FCF level but the GAAP net income figures ($268K-$319K range in thousands, not millions, across multiple years) suggest systematic large reconciling items or the data reflects thousands rather than full dollar amounts — this ambiguity undermines confidence in true earnings power assessment. Revenue has grown from $1.20B to $1.53B over the period, a satisfactory ~28% growth. The Medicare cap crisis at VITAS and Roto-Rooter margin compression introduce near-term earnings risk that Graham would view with caution. The stock at 52-week highs ($463 = 52w high per price data) suggests Mr. Market is not currently pessimistic, reducing the classic Graham buy signal. Dividend history is not provided in the fact base — a notable omission. Overall: the balance sheet fails Graham's liquidity tests, valuation is not cheap on P/B, and the GAAP earnings anomaly prevents confident application of the P/E test, though FCF metrics and DCF margin of safety provide partial support for a 'watch' rather than 'avoid.'

Key points

DCF intrinsic value $738/share vs. $463 current price implies ~59% upside; bear case $554 still above current price, suggesting meaningful margin of safety on DCF basis
FCF is strong and consistent: $250M-$430M across 2020-2024 history; price-to-FCF of 16.7x is reasonable and FCF margin of 24% is excellent
Minimal long-term debt ($92.5M); debt-to-equity of only 0.083; net cash position (cash $178M vs. LT debt $92.5M) is a Graham positive
Revenue grew from $1.20B (2022) to $1.53B (2024), ~27% growth over the period — satisfactory
Operating margin 23.9% and ROIC 23.9% demonstrate genuine competitive returns on capital

Red flags

Current ratio of 1.38 fails Graham's minimum of 2.0; current assets ($394.7M) are only 0.72x total liabilities ($549.6M), well below Graham's 2x rule
Price-to-book of 5.5x is high; P/E × P/B product far exceeds Graham's 22.5 ceiling (even using normalized earnings)
GAAP net income reported as $301,999 (apparently dollars, not thousands) against $366M operating income — this extreme divergence is unexplained in the fact base and creates major uncertainty about true reported earnings power
Stock is at or near its 52-week high of $463; Mr. Market is not offering a pessimist's discount — Graham prefers buying from fear, not from a recovering or rising market
Dividend record not provided in the fact base — Graham requires uninterrupted multi-decade dividend payment history for defensive classification; this gap undermines the defensive stock case
Medicare cap exposure ($28M 2025 accrual at VITAS) and Roto-Rooter margin compression introduce earnings instability risk that challenges Graham's requirement for consistent, predictable earnings

Stanley Druckenmiller — 🟡 watch · 48/100 · medium confidence

CHE presents a mixed picture from a Druckenmiller forward-earnings-momentum lens. The core thesis would be a recovery/inflection play: VITAS hospice normalizing after the 2025 Medicare cap crisis, Roto-Rooter margin recovery from an insurance/labor/tariff shock, and dual-segment earnings re-acceleration into 2026. Q1 2026 beat and guidance raise to $24.00-$24.75 (from $23.25-$24.25 post-Q4 disaster) suggests early inflection is occurring — the stock rallied +8.4% on Q1 results, which is the kind of price confirmation I need to see. However, the setup lacks the clean asymmetry and directional conviction I require for a concentrated position. The second derivative on earnings is turning up (Q4 miss followed by Q1 beat, guidance revised higher), but the magnitude of the recovery is modest, not explosive. More importantly, the fundamental drivers of the weakness — Google search cost inflation for Roto-Rooter, Medicare cap structural risk in Florida, margin compression in both segments — have not been demonstrably reversed; they are 'management says it's fine' stories. The tape is uninspiring: stock is at its 52-week high ($463 per the price block shows 0% below 52w high) which is price confirmation, BUT the 52w high/low discrepancy (562.77 vs 365.21 from fundamentals block vs 463.28 as current price) suggests the fact base may have a data inconsistency — the fundamentals block shows 52w high of $562.77, meaning the stock is actually ~18% below its 52w high, which is NOT making new highs. That's a yellow flag on tape confirmation. FCF generation is strong ($368M, 24% margin, price/FCF of only 16.7x) giving a clean financial picture, but CHE is a slow-growth healthcare services business, not a secular winner riding a powerful macro wave. Revenue CAGR is only 6.7%, EPS growth is choppy, and there is no identifiable mega-catalyst — no Fed pivot tailwind specific to this name, no secular technology wave, no transformational event. The DCF implies 59% upside ($738 intrinsic vs $463 price) which is value support, but DCF upside without an earnings acceleration catalyst is a value trap in my framework. The bear scenario ($554) still implies meaningful upside from here, providing some floor, but the bull case ($804) isn't driven by a specific identifiable catalyst. Key unknowns: Q2 2026 results (July 29) are the next real test of whether the inflection is real. Until then, the thesis is 'management says it's recovering' without proof. I would watch for: (1) Q2 2026 earnings confirming VITAS cap at zero and Roto-Rooter margins recovering to 23%+, (2) stock breaking decisively above $500 and making new multi-year highs, and (3) broader healthcare services re-rating. Not sized for conviction yet.

Key points

Q1 2026 earnings beat and +8.4% price reaction provides early tape confirmation of earnings inflection
FY2026 EPS guidance raised twice — to $24.00-$24.75 — signals management confidence in recovery trajectory
FCF yield is compelling at ~24% FCF margin with price/FCF of 16.7x; balance sheet clean with net cash position ($178M cash, only $92.5M LT debt)
VITAS Medicare cap projected at zero for Q4 2025 onward — if confirmed, removes largest 2025 earnings headwind
Roto-Rooter expanding market presence (SF and Fort Worth acquisitions) while insurance cost headwind guided as non-recurring
DCF intrinsic value $738 vs $463 current price represents 59% potential upside with bear case still at $554

Red flags

Stock is approximately 18% below 52-week high of $562.77 — NOT making new highs, tape NOT fully confirming thesis
No macro/Fed tailwind specific to this name; CHE is indifferent to rate cycle, removing a key Druckenmiller catalyst
Roto-Rooter structural headwind from Google search monetization is secular, not cyclical — paid leads now 50% of total and rising
Medicare cap risk in Florida tied to structural rate differential — 'management projects zero cap in 2026' is an assumption, not a fact
Multiple insider sales (director selling 1,347 and 500 shares openly) is a mild negative signal at current prices
Earnings trajectory inflecting but the second derivative is modest — this is a turnaround from a miss, not an explosive acceleration
No identifiable mega-catalyst or secular theme; dual-segment business lacks the leverage to a powerful directional macro bet I prefer
Revenue CAGR only 6.7% — not the kind of growth acceleration that typically drives the concentrated wins I seek

Philip Fisher — 🟡 watch · 48/100 · medium confidence

Chemed is a dual-segment healthcare services company — VITAS (hospice) and Roto-Rooter (plumbing/drain services) — that has some characteristics of a durable franchise but falls short of the Fisher growth ideal in several meaningful dimensions. Revenue CAGR of 6.7% over three years is modest but not exceptional for healthcare services. Crucially, there is no R&D spend visible in the fact base — this is a services business, not a product innovator, so the Fisher framework applies only partially (I engage because there is a credible multi-year runway in hospice demographics, not because of any R&D pipeline). VITAS benefits from a powerful secular tailwind: aging U.S. demographics structurally expand the hospice-eligible population. ADC growth of +6.1% YoY and admissions growth ex-Covenant of +4.9% signal real volume expansion, not just price. However, the Medicare cap crisis in Florida is a genuine structural risk — the 3% rate differential between Florida and national cap growth rates is not fully company-controlled and recurred despite management's prior optimism. Roto-Rooter presents a more problematic picture: organic revenue is essentially flat (+0.9% residential in Q2 2025), margins compressed 517 bps YoY, Google search dependency is rising (now 50% paid leads vs. 40% historical), and the competitive dynamic vs. PE-backed rivals is unfavorable. From a Fisher candor standpoint, management is notably transparent — acknowledging missed expectations, explaining root causes in detail on the call, and distinguishing operational from structural headwinds. This is commendable and scores well on integrity criteria. Free cash flow is exceptional at $368M (24% margin), capital discipline is strong (net cash position, low debt), and ROIC of 23.9% is impressive for a services company. The valuation DCF shows ~59% upside to intrinsic value at $738/share, and price-to-FCF of 16.7x is reasonable. But Fisher growth investing demands a multi-year compounding growth engine driven by organizational excellence and competitive advantage. VITAS qualifies partially — CON moats, demographic tailwind, scale advantages in a fragmented market. Roto-Rooter does not qualify — it is a mature, undifferentiated services business facing secular headwinds from digital lead aggregation and PE competition. The combination scores as a 'watch': real quality and franchise value in VITAS, but growth trajectory too uncertain and Roto-Rooter too mature/pressured for confident Fisher-style long-term commitment today.

Key points

VITAS hospice benefits from genuine secular growth runway — aging demographics, underpenetrated hospice utilization (only ~50% of eligible Medicare patients use hospice) provide multi-year volume expansion independent of pricing
Revenue CAGR of 6.7% over three years is reasonable but not exceptional; VITAS growing faster than Roto-Rooter which is essentially stagnant organically
Management candor scores well by Fisher standards — earnings call explicitly acknowledged underperformance, detailed root cause analysis, distinguished temporary from structural issues; Q4 2025 miss followed by transparent accounting
ROIC of 23.9% and FCF margin of 24% indicate strong capital efficiency and competitive advantage preservation in the core hospice business
CON (certificate of need) regulatory barriers in many states create partial moat for VITAS, providing some protection against new entrants and acquisition discipline
Balance sheet is excellent: net cash position (~$86M net cash), minimal long-term debt ($92.5M), $178M cash — supports both organic growth investment and opportunistic M&A
Q1 2026 beat with raised FY2026 guidance to $24.00-$24.75 EPS suggests recovery narrative has early validation

Red flags

Zero visible R&D investment — this is a pure services business with no product pipeline, which fundamentally limits Fisher-style compounding growth potential from innovation
Roto-Rooter represents ~40% of revenue and is facing genuine structural headwinds: Google search monetization permanently raising lead costs (paid leads now 50% vs. 40% historical), PE-backed competitors with superior scale, declining organic drain/plumbing volumes
Florida Medicare cap risk is semi-structural: the rate differential between Florida reimbursement and national cap growth creates recurring exposure that management cannot fully control through admission mix alone
Revenue was actually declining from 2020-2022 ($1.33B to $1.20B) before recovering — the multi-year growth record is lumpy and partially COVID-distorted, not a clean compounding trajectory
Director insider selling (1,347 shares sold June 2026, 500 shares May 2026) during a period when stock is near 52-week lows is a mild negative signal on management confidence
Roto-Rooter adjusted EBITDA margin guidance lowered to 21.5%-22.5% for 2026 — an ongoing margin compression trend in a segment that should be a stable cash generator
Massive EPS guidance cut in mid-2025 (~11% reduction to $22.00-$22.30) signals management forecasting discipline issues, which Fisher views skeptically as a sign of either weak business visibility or optimistic prior guidance

Peter Lynch — 🟡 watch · 48/100 · medium confidence

CHEMED is a dual-business healthcare stalwart — VITAS (hospice) and Roto-Rooter (plumbing/drain services) — that I can explain in one sentence: it runs the largest for-profit hospice operator in the US alongside a dominant plumbing/restoration franchise, both generating strong free cash flow. That's understandable, and I like understandable businesses. But applying my PEG framework immediately reveals the core problem: the reported net income figure ($301,999 — which appears to be in thousands, making it essentially near-zero GAAP net income for 2024) creates a nonsensical P/E of 20,363x. This is clearly a GAAP accounting artifact — likely large non-cash items, stock comp, or goodwill charges distorting GAAP earnings while operating cash flow ($417M) and free cash flow ($368M) are genuinely robust. On an FCF basis, price-to-FCF of 16.7x is quite reasonable. Revenue CAGR is 6.7% over three years, and operating income of $366M on $1.53B revenue yields a 23.9% operating margin — excellent for a stalwart. Category: this is a STALWART with some turnaround characteristics currently. Stalwarts should be bought at ~30-50% potential gains and sold when the story matures. The DCF intrinsic value of $738/share vs. current $463 implies 59% upside — that's meaningful margin of safety. For a stalwart, I'd want to buy when the P/E-to-growth looks reasonable. Using adjusted EPS (guidance of ~$24/share for 2026) and revenue growth of 6-7%, the stock trades around 19x forward adjusted earnings with perhaps 6-8% earnings growth — giving an implicit PEG of roughly 2.4-3.2x on forward earnings growth. That's too expensive by my PEG discipline for a stalwart unless growth accelerates. The bull case requires VITAS Medicare cap normalization in 2026 (management guiding zero Florida cap) and Roto-Rooter margin recovery. Q1 2026 showed an 8.4% pre-market pop on a beat, suggesting the turnaround is beginning. However, Q4 2025 was a 15% single-day collapse on missed guidance — management credibility took a hit. Key positives: balance sheet is pristine (D/E of 0.08, $178M cash, long-term debt only $92.5M vs. $1.1B equity), FCF generation is powerful at 24% FCF margin, operating ROIC of 23.9% is exceptional. Roto-Rooter franchise acquisitions ($20.6M San Francisco/Fort Worth, $12M Texas) show disciplined bolt-on capital allocation rather than diworsification — buying adjacent territory in the same business is exactly the roll-out formula I love. The search engine marketing headwind for Roto-Rooter (50% paid leads now vs. 40% historical) is a structural concern that bears watching. Medicare cap risk for VITAS is real but management has a credible mitigation plan with CON market expansion. On balance: the business quality is high, capital allocation is sensible, balance sheet is fortress-like, and DCF suggests meaningful undervaluation. But the PEG is well above 1 on any reasonable EPS growth estimate, the turnaround execution risk is real, and I'd want to see a quarter or two of actual cap-normalized results and Roto-Rooter margin recovery before committing. This is a watch — compelling enough to track closely, not cheap enough on my growth-adjusted metric to buy today.

Key points

Stalwart category: dual-business healthcare/services conglomerate with 23.9% operating margins and 24% FCF margins — high-quality operations
FCF-based valuation attractive: P/FCF of 16.7x and DCF intrinsic value $738 vs. $463 current price implies 59% upside
Balance sheet fortress: D/E of 0.08, $178M cash, minimal long-term debt ($92.5M) — no financial risk, funds growth internally
Roto-Rooter bolt-on M&A ($32.6M in franchise territory acquisitions in 2026) is the roll-out formula I love — same business, adjacent geography
Q1 2026 beat (+8.4% pre-market pop) suggests turnaround from Q4 2025 disaster is underway; management raised 2026 EPS guidance to $24.00-$24.75
VITAS admissions growth (+4.9% ex-Covenant, +6.1% ADC) confirms underlying hospice demand remains structurally intact despite Medicare cap noise
Revenue CAGR of 6.7% over 3 years — steady stalwart growth, not spectacular, but consistent

Red flags

PEG well above 1: Using ~$24 adjusted EPS and 6-7% growth, implied PEG is ~2.5-3x — expensive by my discipline even for a quality stalwart
GAAP net income appears near-zero ($301,999 reported — likely a data artifact) making traditional P/E analysis impossible; opacity in reported earnings is a yellow flag
Management credibility dented: Q4 2025 saw EPS miss of 8.55% and 15% stock collapse, with prior guidance having been far too optimistic
Medicare cap structural risk: Florida reimbursement differential could persist beyond 2025; management's 'zero cap in 2026' projection is an assumption, not a certainty
Roto-Rooter search engine headwind is structural: Google's paid-search monopolization means cost-per-lead will likely keep rising, pressuring margins permanently
Roto-Rooter margin already compressed: Q2 2025 EBITDA margin 21.8% vs historical 25%+; 2026 guidance only 21.5%-22.5% — recovery may be limited
Director selling activity noted (1,347 shares and 500 shares in open-market sales in May-June 2026) — minor but not a bullish signal

Walter Schloss — 🔴 avoid · 28/100 · high confidence

Chemed Corp fails the core Schloss criteria on virtually every hard-asset metric. Price-to-book stands at 5.5x — far above the near-or-below-tangible-book threshold that defines a Schloss bargain. The stock is trading at its 52-week HIGH of $463.28, the exact opposite of the beaten-down, out-of-favor price history Schloss required. Stockholders' equity is $1.12B against a market cap of ~$6.15B, meaning the market prices in a substantial premium to stated book. Much of CHE's enterprise value resides in the intangible value of its VITAS hospice franchise and Roto-Rooter brand — neither of which appear as tangible assets on the balance sheet and neither of which can be independently appraised in the Schloss tradition. While the balance sheet is relatively clean (long-term debt of only $92.5M, debt-to-equity of 0.08, current ratio 1.38), that low leverage is the only significant Schloss-positive feature. The reported net_income figure of $301,999 (effectively zero — almost certainly a GAAP anomaly given large stock comp or one-time charges vs. the $302M historical norm) and a P/E of 20,363x are nonsensical on a GAAP basis, reinforcing that the earnings story is complex rather than simple. Free cash flow of $368M is real and strong, yielding a reasonable P/FCF of 16.7x, but Schloss anchored on assets, not cash flow multiples. ROIC of 23.9% is excellent but signals a high-quality compounder, not a statistical bargain. Director share sales (two separate insider selling transactions noted in news) are mildly negative. The DCF intrinsic value of $738 per share suggests a 59% upside on a cash-flow basis, but that valuation depends 82% on a terminal value — exactly the kind of forecast-dependent thesis Schloss avoided. Revenue CAGR of 6.7% and strong FCF margins make this a quality business, but quality at a premium is not a Schloss buy.

Key points

Price-to-book of 5.5x is roughly 5x above the Schloss comfort zone of near or below tangible book
Stock is at its 52-week HIGH — Schloss only bought depressed, out-of-favor securities
Balance sheet is clean: debt-to-equity 0.08, long-term debt only $92.5M, current ratio 1.38 — the one Schloss-positive
Total assets of $1.67B vs. liabilities of $550M leaves real book equity, but market cap of $6.15B prices in massive intangible premium
Free cash flow of $368M is strong (24% FCF margin) but the valuation case rests on DCF, not on hard assets
82% of DCF value sits in terminal value — entirely forecast-dependent, which Schloss distrusted
Dual-business complexity (hospice + plumbing) with Medicare reimbursement risk and digital marketing headwinds adds opacity

Red flags

Trading at 52-week high — no price dislocation or margin of safety from a depressed entry point
Price-to-book of 5.5x: massively above tangible book, value lives in intangibles and franchise goodwill
Net income reported as $301,999 (essentially zero) on GAAP basis — accounting complexity and opacity
Multiple director open-market share sales (Andrea Lindell sold 1,347 shares; another director sold 500 shares) — insiders not buying
Medicare cap accrual ($28M in 2025) is a recurring regulatory risk specific to hospice — hard to appraise
Roto-Rooter margin compression and Google search dependency add complexity to the earnings picture
DCF intrinsic value depends 82% on terminal value growth assumptions — not a hard-asset margin of safety

Fact base appendix

Price

last_close: 463.28
as_of: 2026-06-28
high_52w: 463.28
low_52w: 463.28
pct_below_52w_high: 0.0

Fundamentals

last_price: 463.28
market_cap: 6149626431
fifty_two_week_high: 562.77
fifty_two_week_low: 365.21
beta: 0.5039707
currency: USD
exchange: NEW YORK STOCK EXCHANGE, INC.
sector: Health Care
industry: Health Care
price_source: finnhub
bars: 1
entity: CHEMED CORPORATION
fiscal_year: 2024
revenue: 1530978000
revenue_period: 2024-12-31
net_income: 301999
net_income_period: 2024-12-31
operating_income: 366493000
operating_income_period: 2024-12-31
operating_cash_flow: 417497000
operating_cash_flow_period: 2024-12-31
capex: 49531000
capex_period: 2024-12-31
total_assets: 1668575000
total_assets_period: 2024-12-31
total_liabilities: 549582000
total_liabilities_period: 2024-12-31
current_assets: 394748000
current_assets_period: 2024-12-31
current_liabilities: 285695000
current_liabilities_period: 2024-12-31
stockholders_equity: 1118993000
stockholders_equity_period: 2024-12-31
cash_and_equivalents: 178350000
cash_and_equivalents_period: 2024-12-31
long_term_debt: 92500000
long_term_debt_period: 2022-12-31
shares_outstanding: 13765136
operating_margin: 0.2394
net_margin: 0.0002
roe: 0.0003
debt_to_equity: 0.0827
current_ratio: 1.3817
roic: 0.239
free_cash_flow: 367966000
fcf_margin: 0.2403
pe_ratio: 20363.07
price_to_fcf: 16.71
price_to_sales: 4.02
revenue_cagr: 0.0667
revenue_cagr_years: 3
fundamentals_source: edgar_companyfacts
price_to_book: 5.5
earnings_yield: 0.0604
peg: 3052.93

Filings reviewed

8-K (2026-05-19) https://www.sec.gov/Archives/edgar/data/19584/000001958426000014/che-20260518x8k.htm
10-Q (2026-04-28) https://www.sec.gov/Archives/edgar/data/19584/000001958426000012/che-20260331x10q.htm
8-K (2026-04-23) https://www.sec.gov/Archives/edgar/data/19584/000001958426000010/che-20260423x8k.htm
10-K (2026-02-27) https://www.sec.gov/Archives/edgar/data/19584/000156276226000020/che-20251231x10k.htm
10-Q (2025-10-31) https://www.sec.gov/Archives/edgar/data/19584/000001958425000006/che-20250930x10q.htm
10-K (2025-02-28) https://www.sec.gov/Archives/edgar/data/19584/000156276225000038/che-20241231x10k.htm

Other sources

[news] Chemed Corp (CHE) Earnings Forecast: Future EPS & Revenue Growth Estimates - TradingKey
[news] Director Andrea Lindell Sells 1,347 Shares of Chemed Corp (CHE) - GuruFocus
[news] Chemed To Report First Quarter 2026 Earnings April 23, Related Conference Call To Be Held On April 24 - GlobeNewswire
[news] Roto-Rooter pays $20.6M for San Francisco and Fort Worth markets - Stock Titan
[news] Chemed (NYSE: CHE) director granted 386 capital shares in stock award - Stock Titan
[news] Chemed Corp stock hits 52-week low at 397.05 USD - Investing.com
[news] Chemed Corporation Actuals & Estimates (NYSE:CHE) - TradingView
[news] CHE Forecast — Price Target — Prediction for 2027 - TradingView
[news] Price to earnings forward of Chemed Corp – NYSE:CHE - TradingView
[news] Chemed Corp (CHE) Stock Rises on Q1 2026 Earnings - Quiver Quantitative
[news] Chemed Reports First-Quarter 2026 Results - GlobeNewswire
[news] Chemed Corp (CHE) Institutional Confidence - TradingKey
[news] Chemed Corp (CHE) Stock Analysis: A Robust Healthcare Play With Solid Financial Metrics - DirectorsTalk Interviews
[news] Roto-Rooter spends $12M to take over franchise in 21 Texas counties - Stock Titan
[news] Chemed (NYSE: CHE) director sells 500 shares in open-market trade - Stock Titan
[discussion] $CHE Put Open Interest Shifts for Chemed Corp This Week https://www.macroaxis.com/stock-options/CHE/
[discussion] $CHE Really good write-up that perfectly summarizes CHE's present situation. So if you want to b
[discussion] Wall St is expecting 5.63 EPS for $CHE Q2 [Reporting 07/29 AMC] http://www.estimize.com/intro/che?ch
[discussion] Fundamental analysis of $CHE (CHEMED CORP) based on financial data and reported results. #CHE #CHEME
[discussion] $CHE (+8.4% pre) Chemed (CHE) Beats Q1 Earnings and Revenue Estimates

https://ooc.bz/l/99915

[discussion] After Hours Top Gainers PT2

$HKPD $TIVC $CISS $PDFS $CHE
[discussion] $CHE Q1 '26 Earnings Results & Recap

• Reported GAAP EPS of $4.85 down -1.22% YoY • Reporte

[discussion] Wall St is expecting 5.30 EPS for $CHE Q1 [Reporting 04/23 AMC] http://www.estimize.com/intro/che?ch
[discussion] $CHE just got crushed — and this isn’t just a “small miss.” ⚠️

Shares slipped 15% after Q4 earnings

[discussion] $CHE drops 15% post-earnings — what’s the downturn about? 📉

Chemed's Q4 adjusted EPS of $6.42 m

[discussion] $CHE I know little to nothing about this stock and company. Apparently none of miss was baked in??
[discussion] $CHE Q4 '25 Earnings Results & Recap

• Reported GAAP EPS of $5.48 down -9.87% YoY • Reporte

[discussion] $CHE
[discussion] $CHE
[discussion] Wall St is expecting 5.99 EPS for $CHE Q1 [Reporting 04/29 AMC] http://www.estimize.com/intro/che?ch
[earnings_call] Chemed CHE Q2 2025 Earnings Call

Generated 2026-07-17T19:39:22 · est. cost $1.52

What each investor thinks

Valuation Referee (Damodaran-style) Referee

pass · 78

Joel Greenblatt Value

pass · 76

Bruce Greenwald Value

pass · 74

Charlie Munger Quality

pass · 74

Michael Mauboussin Quality

pass · 74

Ray Dalio Risk

pass · 72

Forensic Short-Seller (Chanos/Einhorn-style) Referee

pass · 72

AI & Disruption Referee (Christensen-style) Referee

pass · 72

Warren Buffett Quality

watch · 62

Terry Smith (Fundsmith) Quality

watch · 62

Chuck Akre Quality

watch · 58

Seth Klarman Value

watch · 58

Howard Marks Risk

watch · 58

Benjamin Graham Value

watch · 52

Stanley Druckenmiller Risk

watch · 48

Philip Fisher Growth

watch · 48

Peter Lynch Growth

watch · 48

Walter Schloss Value

avoid · 28

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