Just caught up on CHE's earnings from a few months back and wow, that was rough. Chemed stock got absolutely hammered after they reported - dropped like 15% the day they announced. The numbers just didn't land. Adjusted EPS came in at $6.42, down 6% year over year, and that missed estimates by over 8%. Revenue was basically flat at $639 million, also missed the consensus call.

What's interesting is their two main businesses are moving in totally different directions. VITAS, their hospice care division, actually grew revenues a bit - up 1.9% to $418.8 million. But Roto-Rooter, the plumbing side, got hit harder with a 3.7% drop to $220.6 million. Residential plumbing was down 3.1% while commercial was barely up 1.6%.

The margins are what really concerns me though. Gross margin contracted by 181 basis points and operating margin fell 202 bps to 18.3%. That's a significant squeeze. They're burning through cash too - ended the quarter with $74.5 million in cash versus $178.4 million at the end of 2024. Did drop $174.6 million on share buybacks though.

Management is trying to sound optimistic about 2026 being a turnaround year, especially for VITAS dealing with Medicare cap issues, but the market clearly wasn't convinced. CHE is sitting at a Hold rating right now. Might be worth watching if they can actually execute on that turnaround narrative.