Title

Earning Preview: Chemed this quarter’s revenue is expected to increase by 3.61%, and institutional views are constructive

Abstract

Chemed Corporation will release quarterly results on February 25, 2026 Post Market; this preview summarizes expected revenue, margins, net profit, and adjusted EPS, alongside segment dynamics and institutional signals shaping near‑term expectations.

Market Forecast

Consensus data compiled for the current quarter indicates Chemed Corporation’s total revenue is projected at $659.08 million, up 3.61% year over year, with adjusted EPS estimated at $6.89, reflecting a 1.57% year‑over‑year increase; EBIT is forecast at $126.33 million, a 1.17% year‑over‑year gain. Margin guidance was not formally issued; investors will track gross profit and net profit margins versus last quarter’s baselines.

Chemed’s main business remains balanced between healthcare and home services, with stable revenue mix supporting visibility into earnings quality. The most promising segment for incremental growth is Roto‑Rooter, anchored by last quarter revenue of $217.16 million and favorable operating leverage into the current period.

Last Quarter Review

Chemed Corporation reported last quarter revenue of $624.90 million (up 3.09% year over year), a gross profit margin of 31.51%, GAAP net profit attributable to shareholders of $64.24 million, a net profit margin of 10.28%, and adjusted EPS of $5.27 (down 6.56% year over year).

A key financial highlight was the quarter‑on‑quarter rebound in GAAP net profit, which improved by 22.37%, demonstrating margin resilience and disciplined expense control. Main business revenues were led by VITAS at $407.74 million and supported by Roto‑Rooter at $217.16 million, with the combined mix underpinning a 3.09% year‑over‑year increase in total revenue.

Current Quarter Outlook

Main Business: VITAS

VITAS is expected to anchor Chemed’s consolidated performance this quarter, sustaining the revenue base into an earnings profile characterized by tight cost management and steady operational execution. With the company‑wide revenue estimate at $659.08 million and adjusted EPS at $6.89, the implied contribution from the healthcare segment is central to meeting targets. Last quarter’s gross margin of 31.51% and net margin of 10.28% set reference points for assessing profitability traction; investors will watch whether VITAS can hold or modestly expand margins through mix and productivity. The data suggests modest year‑over‑year EPS growth of 1.57% and revenue growth of 3.61% at the consolidated level; maintaining unit economics and limiting overhead inflation within VITAS will be critical to capturing the incremental upside embedded in those forecasts.

Operationally, census and length‑of‑stay have a direct impact on revenue recognition, while labor costs and service intensity influence margins. The quarter‑on‑quarter gain in GAAP net profit last period indicates better absorption and expense discipline, offering a path to stabilize earnings even if price or volume momentum remains gradual. Management’s focus on clinical programs and operating efficiency can yield incremental margin benefits this quarter if execution continues to track well, particularly if non‑recurring items do not recur and fixed costs are controlled.

For valuation sensitivity, the market is likely to key off delivery against EPS and net margin targets more than absolute revenue. If consolidated margins show improvement from last quarter’s 31.51% gross and 10.28% net baselines, it would validate cost management and mix optimization in VITAS while providing leverage to earnings quality in the current period.

Most Promising Segment: Roto‑Rooter

Roto‑Rooter’s last quarter revenue of $217.16 million positions it as Chemed’s most promising near‑term growth segment due to its relatively attractive operating leverage on incremental volume. In the current quarter, the consolidated EBIT forecast of $126.33 million (up 1.17% year over year) implies a stable contribution from services, with potential upside if pricing discipline and capacity utilization hold. While explicit segment‑level forecasts are not provided, the service line’s margin profile historically benefits from mix shifts toward higher‑value jobs and optimized dispatch, supporting profitability even in modest demand environments.

The segment’s ability to translate small revenue beats into outsized EBIT contribution is a notable factor for this quarter’s equity narrative. In last quarter’s results, Chemed delivered a 22.37% quarter‑on‑quarter improvement in GAAP net profit; extending that momentum hinges in part on Roto‑Rooter’s throughput and margin stability. If call volume normalizes at or above seasonal patterns and the business avoids outsized weather or project timing effects, incremental gross profit can support consolidated margins toward or above last quarter’s 31.51% reference level.

From a capital allocation perspective, the new $300 million share repurchase authorization provides flexibility to absorb any volatility in segment outcomes while supporting per‑share metrics. This could amplify the earnings impact of Roto‑Rooter’s operating performance, especially if the share count is reduced across the quarter and through year‑end.

Key Stock Price Drivers This Quarter

The first driver is whether Chemed meets or exceeds the consolidated revenue forecast of $659.08 million and adjusted EPS estimate of $6.89. Given last quarter’s adjusted EPS of $5.27 (down 6.56% year over year) and solid quarter‑on‑quarter net profit growth, the market will look for confirmation that earnings normalization is underway and sustainable. Beats on EPS, coupled with stable or improving gross and net margins versus last quarter’s levels, would be taken as evidence of stronger execution and mix quality.

The second driver is operating leverage and expense control across segments. VITAS’ ability to maintain service levels without cost slippage, alongside Roto‑Rooter’s capacity utilization and pricing mix, will drive consolidated EBIT toward the $126.33 million forecast. Even small variances in labor and overhead can materially sway net margins; therefore, monitoring sequential margin progression remains crucial to the stock’s immediate reaction.

The third driver is capital return deployment. On February 13, 2026, Chemed announced an additional $300 million share repurchase authorization and declared a quarterly dividend of $0.60. The buyback provides a buffer for EPS if revenue or margin is slightly below plan, and it signals confidence in underlying cash generation. If repurchase activity is active through the quarter, investors may assign a premium to per‑share outcomes, particularly if execution remains consistent across both segments.

Analyst Opinions

Based on the institutional updates collected between January 1, 2026 and February 18, 2026, sentiment skews constructive: bullish commentary accounts for 100%, with no bearish calls identified in that window. The most material institutional signal came on February 13, 2026, when Chemed Corporation’s Board of Directors authorized an additional $300 million for stock repurchases and declared a $0.60 quarterly dividend; this action is generally interpreted as supportive of shareholder returns and as a sign of confidence in cash flow durability. Although explicit sell‑side earnings previews were limited in the specified period, the market has treated these capital return measures as positive heading into the print, implying investors expect stable revenue growth of 3.61% year over year and incremental improvement in per‑share metrics.

The constructive stance centers on the company’s ability to deliver on its adjusted EPS estimate of $6.89 and sustain revenue at the $659.08 million forecast. Observers highlight last quarter’s 22.37% sequential rebound in GAAP net profit and a 3.09% year‑over‑year revenue increase as markers of operational stability that can bridge into this quarter’s results. The view is that, with repurchases augmenting per‑share outcomes and dividend continuity reaffirmed, the balance of expectations favors at least in‑line performance on EPS, with upside if segment execution holds and margins track near or slightly above last quarter’s 31.51% gross and 10.28% net baselines.

In framing what would validate the constructive outlook, bulls emphasize three checkpoints: consolidated revenue meeting or exceeding $659.08 million, adjusted EPS at or above $6.89, and evidence of disciplined cost control in VITAS alongside operating leverage in Roto‑Rooter. If these criteria are satisfied, they anticipate the positive institutional bias will persist through March and into subsequent updates, particularly if buyback activity continues and the company maintains a clear path to improving year‑over‑year EPS growth beyond the current 1.57% forecast.