Core Viewpoint - Chemed reported quarterly earnings of $5.64 per share, missing the Zacks Consensus Estimate of $5.76 per share, but showing an increase from $5.32 per share a year ago [1][2] Financial Performance - The company posted revenues of $606.18 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 1.12%, compared to $564.53 million in the same quarter last year [3] - Chemed has surpassed consensus revenue estimates just once over the last four quarters [3] Stock Performance - Chemed shares have increased approximately 4.1% since the beginning of the year, while the S&P 500 has gained 22.1% [4] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [7] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $7.05 on revenues of $641.75 million, and for the current fiscal year, it is $23.58 on revenues of $2.44 billion [8] - The trend of estimate revisions for Chemed is mixed, which could change following the recent earnings report [7] Industry Context - The Medical - Outpatient and Home Healthcare industry is currently in the top 9% of over 250 Zacks industries, indicating a favorable outlook [9] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that industry performance can significantly impact stock performance [6][9]

Revenue Performance - Revenue for the third quarter of 2024 increased by 7.4% to $606.2 million compared to the prior-year period[4] - Service revenues for Q3 2024 reached $606.2 million, a 7.4% increase from $564.5 million in Q3 2023[28] - The company reported a total of $1.79 billion in service revenues for the nine months ended September 30, 2024, compared to $1.68 billion for the same period in 2023, reflecting a 6.5% increase[28] - Total net revenue for the nine months ended September 30, 2024, was $1,119,970,000, compared to $965,066,000 for the same period in 2023, reflecting a 16.0% increase[40] Earnings and Profitability - Adjusted diluted EPS rose by 6.0% to $5.64, while GAAP diluted EPS increased by 1.4% to $5.00[4] - Net income for Q3 2024 was $75.8 million, compared to $75.0 million in Q3 2023, reflecting a 1.1% increase[28] - Earnings per share for Q3 2024 were $5.04, up from $4.97 in Q3 2023, representing a 1.4% increase[28] - The company reported a net income of $211,680 for the nine months ended September 2024, compared to $182,456 for the same period in 2023, representing a 16.0% increase[38] Segment Performance - VITAS segment net patient revenue reached $391.4 million, marking a 17.3% increase, with average daily census up by 15.5%[4] - Roto-Rooter segment revenue decreased by 6.9% to $214.8 million, with net income down by 18.9% to $39.8 million[5] - Total revenue for VITAS in Q3 2024 was $70,887, while Roto-Rooter reported $56,382, showing a significant performance difference between the two segments[36] Cash and Assets - As of September 30, 2024, Chemed had total cash and cash equivalents of $238.5 million and no debt[16] - Cash and cash equivalents increased to $238.5 million in Q3 2024, up from $173.2 million in Q3 2023[31] - Total assets as of September 30, 2024, amounted to $1.77 billion, an increase from $1.56 billion as of September 30, 2023[31] Shareholder Returns - The company repurchased 100,000 shares for $57.8 million, with approximately $168.1 million remaining under its share repurchase authorization[18] - Full-year 2024 earnings per diluted share guidance is estimated to be in the range of $23.00 to $23.15, representing a 13.3% to 14.0% increase from 2023[19] Expenses and Costs - Selling, general and administrative expenses for Q3 2024 totaled $102.0 million, a 1.4% increase from $99.6 million in Q3 2023[29] - The cost of services provided and goods sold for the three months ended September 30, 2024, was $362,358,000, up from $230,804,000 in 2023, reflecting a significant increase of 57%[33] - Total costs and expenses for the nine months ended September 30, 2024, were $1,538,679,000, compared to $1,449,330,000 in 2023, indicating a rise of 6.2%[35] Cash Flow - Cash provided by operating activities for the nine months ended September 30, 2024, was $252,584,000, compared to $221,736,000 in 2023, an increase of 13.9%[32] - Net cash used by investing activities for the nine months ended September 30, 2024, was $131,391,000, significantly higher than $48,972,000 in 2023[32] - Net cash used by financing activities for the nine months ended September 30, 2024, was $146,700,000, compared to $73,740,000 in 2023, indicating an increase of 98.7%[32] Operational Metrics - Average revenue per patient per day for VITAS was $199.16, an increase of 139 basis points year-over-year[8] - Days of care in homecare increased to 1,622,680 in Q3 2024 from 1,391,377 in Q3 2023, representing a 16.6% growth[40] - Average daily census in homecare rose to 17,639 days in Q3 2024, compared to 15,124 days in Q3 2023, indicating a 16.6% increase[40] - Total admissions for the nine months ended September 30, 2024, were 51,020, an increase from 47,564 in the same period of 2023, marking a 5.2% rise[40] Tax and Interest - Income taxes for Chemed Corporation in Q3 2024 amounted to $67,662, compared to $37,778 in Q3 2023, showing a significant increase of 79.2%[37] - Interest expense for Chemed Corporation in Q3 2024 was $1,281, compared to $2,766 in Q3 2023, indicating a decrease of 53.7%[37] Strategic Investments - Covenant Health acquisition contributed approximately $10 million to $11 million in revenue for VITAS in Q3 2024[6] - The company incurred acquisition expenses of $386 in Q3 2024, while the nine-month total was $1,339, reflecting ongoing strategic investments[38] Miscellaneous - Estimated uncollectible accounts as a percent of revenues were 0.6% for Q3 2024, down from 1.3% in Q3 2023[41] - Days of revenue outstanding, including unapplied Medicare payments, was 37.5 days for Q3 2024, compared to 36.4 days in Q3 2023[41] - Significant credits/charges included stock option expenses of $(6,038,000) and long-term incentive compensation of $(3,083,000) for Q3 2024[42]

Core Viewpoint - Chemed Corporation (CHE) is anticipated to experience growth in the upcoming quarters, primarily driven by the VITAS business, while facing challenges from a sluggish macroeconomic environment and competitive disadvantages [1][7]. Group 1: Company Performance - Chemed's stock has increased by 11.7% over the past year, underperforming compared to the industry's growth of 33.9% and the S&P 500's increase of 32.3% [2]. - The company has a market capitalization of $8.72 billion and an estimated earnings growth rate of 16.2% for 2024, which is higher than the S&P 500's growth rate of 15.7% [2]. - In the trailing four quarters, Chemed delivered an average earnings surprise of 1.88% [2]. Group 2: Key Upsides - The VITAS segment has shown significant improvement, with a robust start to the second quarter following the acquisition of Covenant Health and Community Services, leading to an 11% increase in admissions and a 14.4% rise in Average Daily Census (ADC) [3][4]. - VITAS' net revenues increased by 16.7% year over year, supported by a 2.5% rise in the average Medicare reimbursement rate and a 14.4% increase in days of care [4]. - The net bedside headcount for VITAS increased by 234 licensed professionals, indicating a strong operational outlook [4]. - The Roto-Rooter brand has demonstrated resilience, maintaining strong close rates at the call center and during technician dispatch [5]. - The commercial plumbing business has seen unprecedented high demand post-pandemic, with initiatives to enhance sales staff and customer relationship management expected to positively impact performance [6]. Group 3: Key Downsides - Chemed faces macroeconomic headwinds, including rising staffing and labor costs, inflationary trends, and increased logistics costs, which have negatively impacted performance [7]. - In the second quarter, the cost of services provided and goods sold rose by 4.2% year over year, while selling, general, and administrative expenses increased by 7.7% [7]. - The competitive landscape for both Roto-Rooter and VITAS is challenging, with a need for innovation and effective market response to maintain operational success [8]. Group 4: Financial Estimates - The Zacks Consensus Estimate for Chemed's 2024 earnings per share (EPS) is $23.58, remaining constant over the past 30 days [9]. - The estimated revenues for 2024 are projected at $2.44 billion, indicating a 7.75% increase from the previous year [9].

It has been about a month since the last earnings report for Chemed (CHE) . Shares have added about 5.7% in that time frame, outperforming the S&P 500. Will the recent positive trend continue leading up to its next earnings release, or is Chemed due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers. Chemed Q2 Earnings Miss Estimates, Margins Rise Chemed Co ...

1 IF D H HT T 100 - 100 1 i T 1 Pgiam/iStock via Getty Images Investment update Following my last publication on Chemed Corporation (NYSE:CHE) the stock is flat, and I am reiterating my buy rating on the stock after its Q2 FY'24 earnings. The last publication, titled "Continues to compound shareholder value at double-digit returns" advocated to size into CHE based on a number of factors, all of which are still relevant today, namely: CHE is a long-term compounder with a cycle of producing high returns on th ...

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Chemed (CHE) is one such stock that our proprietary system currently recommends. The company not only has a favorable Growth Score, but also carries a top Zacks Rank. Earnings growth is arguably the most important factor, as stocks exhibiting exceptionally surging profit levels tend to attract the attention of most investors. And for growth investors, double-digit earnings growth is definitely preferable, and often an indication of strong prospects (and stock price gains) for the company under consideration ...

For cash, accounts receivable and accounts payable, the carrying amount is a reasonable estimate of fair value because of the liquidity and short-term nature of these instruments. As further described in Note 5, our outstanding long-term debt has a floating interest rate that is reset at short-term intervals, generally 30 or 60 days. The interest rate we pay also includes an additional amount based on our current leverage ratio. As such, we believe our borrowings reflect significant nonperformance risks, ma ...