Chemed Corp Q2 2025 Earnings Call Highlights: Navigating Challenges and Strategic Growth

Chemed Corp reported Q2 2025 net revenue of $396.2 million for VITAS, a 5.8% increase YoY. Roto-Rooter revenue increased 0.6% YoY. Adjusted EBITDA for VITAS was flat at $66.8 million, while Roto-Rooter's decreased 18.7% to $48.6 million. The company revised its full-year 2025 earnings per diluted share guidance to $22-$22.30, down from $24.95-$25.45.

Chemed Corporation reported mixed performance for the second quarter of 2025, with earnings per share (EPS) of $4.27 falling short of expectations and revenue coming in below projections. The company's stock price dropped 8.8% in after-hours trading, closing at $430.20.

Key Takeaways:
- EPS: $4.27 (missed forecast of $5.39)
- Revenue: $618.8 million (below forecast of $650.6 million)
- Stock price: Down 8.8% to $430.20

Chemed's VITAS division, which provides hospice care, saw a 5.8% increase in net revenue year-over-year to $396.2 million. However, Roto Rooter, the company's plumbing and drain cleaning division, experienced a significant 18.7% decline in adjusted EBITDA to $48.6 million.

The company revised its full-year 2025 EPS guidance downward to $22.00-$22.30 from $24.95-$25.45. Despite the earnings miss, Chemed's stock appears undervalued, with management actively buying back shares to support shareholder value.

Market Reaction:
Following the earnings announcement, Chemed's stock price dropped 8.8%, reflecting investor disappointment. The stock fell to $430.20, moving closer to its 52-week low of $410. This decline contrasts with broader market trends, where many healthcare stocks have remained stable.

Outlook:
Chemed anticipates improved performance in the latter half of the year, with VITAS revenue expected to increase by 7.5%-8.5% and Roto Rooter projecting a 1.25%-1.75% revenue increase. The company maintains a strong financial health score of 3.05 out of 5, with robust cash flows sufficient to cover interest payments and a conservative debt-to-equity ratio of 0.12.

References:
[1] https://www.investing.com/news/transcripts/earnings-call-transcript-chemed-misses-q2-2025-estimates-shares-drop-93CH-4160806