Just caught the CHE earnings and man, this one stung. Stock got absolutely hammered - dropped like 15% after they reported Q4 numbers that missed on both earnings and revenue. Fourth quarter adjusted EPS came in at $6.42, down 6% year-over-year and beat expectations by a mile... in the wrong direction. Revenue was $639.3M, basically flat compared to last year but still missed consensus. The real problem though? Margins are getting crushed. Gross margin contracted almost 200 basis points, which is rough.

Breaking down the two main segments - VITAS (the hospice side) actually held up okay with revenues up 1.9%, but Roto-Rooter is the one struggling. Residential business down 3.1%, and you can see the weakness in water restoration dropping 10%. Commercial side managed slight gains but not enough to offset the residential drag. The company's also burning through cash - went from $178M to $74.5M in cash by year-end, partly because they bought back 400k shares.

What's interesting is management is trying to spin 2026 as a transition year. They're guiding for CHE revenue growth of 5.5% and adjusted EPS of $23.25-$24.25, but honestly that's below what consensus was expecting. The VITAS Medicare Cap situation in Florida seems to be a bigger headwind than they initially thought. If CHE can't stabilize margins and get Roto-Rooter growing again, this could trend lower. Holding pattern for now.