Chemed (CHE): Evaluating Valuation After This Year’s Double-Digit Share Price Slide
Chemed (CHE) has quietly slid this year, even as its underlying hospice and plumbing businesses keep growing. That disconnect between share price and fundamentals is what makes the stock interesting right now.
See our latest analysis for Chemed.
The share price has drifted lower this year, with a roughly 20 percent year to date share price decline and a similar double digit drop in one year total shareholder return. This suggests sentiment is fading even as earnings keep grinding higher.
If Chemed’s mix of healthcare and essential services has your attention, it could be worth comparing it with other resilient providers using our healthcare stocks for more potential ideas.
With earnings still rising, valuation metrics flashing a sizeable discount to analyst targets, and the stock down double digits, the key question now is clear: is Chemed a mispriced compounder or is the market already baking in its growth?
Most Popular Narrative: 27.8% Undervalued
Compared with Chemed’s last close of $420.48, the most widely followed narrative sees fair value materially higher, implying a meaningful valuation gap.
The ramp-up of new Certificate of Need (CON) locations in underserved Florida counties (e.g., Pinellas and Marion) is expected to materially expand VITAS's service footprint, aligning with the continued aging U.S. population and the shift toward home-based care, both key drivers of higher patient volumes and long-term top-line revenue growth.
Want to see what kind of revenue runway and margin lift these expansion plans are banking on, and how a premium future earnings multiple ties it all together?
Result: Fair Value of $582.25 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, persistent Medicare reimbursement caps and weaker Roto Rooter residential demand could constrain margins and derail the upbeat long term growth thesis.
Find out about the key risks to this Chemed narrative.
Build Your Own Chemed Narrative
If you see Chemed’s story differently, or simply prefer to dig into the numbers yourself, you can build a personalized view in minutes using Do it your way.
A great starting point for your Chemed research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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