Chemed Reports Mixed Q4 Results, Issues Strong 2026 EPS Guidance and Announces Significant Share Repurchase
Summary
Chemed reported flat Q4 revenue and declining EPS, but issued strong 2026 EPS guidance, significantly reduced VITAS Medicare Cap limitations, and executed a substantial share repurchase.
Key Events
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Mixed Q4 2025 Financial Performance
Consolidated revenue was $639.3 million, essentially flat year-over-year. GAAP Diluted EPS decreased 9.0% to $5.48, and Adjusted Diluted EPS decreased 6.0% to $6.42.
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Strong 2026 EPS Guidance
The company forecasts full-year 2026 Adjusted Diluted EPS in the range of $23.25 to $24.25, a significant increase from $21.55 in 2025. Earnings trajectory is weighted towards the second half of the year.
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Significant Share Repurchase
Chemed repurchased 400,000 shares of its stock for $174.6 million during the fourth quarter of 2025, with approximately $127.3 million remaining under its authorization plan.
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Improved VITAS Outlook with Reduced Medicare Cap
VITAS Healthcare is estimated to see its Medicare Cap billing limitations decrease significantly to $9.5 million in calendar 2026, down from $27.2 million in 2025, with revenue expected to increase 5.5% to 6.5%.
Analysis
Chemed Corporation reported a mixed fourth quarter for 2025, with consolidated revenue remaining flat and both GAAP and Adjusted Diluted EPS declining. However, the company provided robust guidance for 2026, projecting a notable increase in Adjusted Diluted EPS to a range of $23.25-$24.25, up from $21.55 in 2025. This positive outlook is significantly bolstered by an estimated reduction in VITAS's Medicare Cap billing limitations from $27.2 million in 2025 to $9.5 million in 2026, signaling a resolution to a key segment headwind. Additionally, the company demonstrated strong capital allocation by repurchasing $174.6 million in stock during the quarter, indicating management's confidence in future performance. Investors should monitor the execution of the 2026 guidance, particularly the expected second-half weighting of earnings and the recovery in the Roto-Rooter segment.
At the time of this filing, CHE was trading at $466.60 on NYSE in the Industrial Applications And Services sector, with a market capitalization of approximately $6.6B. The 52-week trading range was $408.42 to $623.61. This filing was assessed with positive market sentiment and an importance score of 8 out of 10.