What Happened?
Shares of healthcare services company Chemed Corporation (NYSE: CHE) fell 15.6% in the afternoon session after the company reported financial results for the fourth quarter of 2025 that missed Wall Street's expectations for both revenue and profit.
Chemed's revenue was essentially flat compared to the prior year at $639.3 million, falling short of analyst forecasts. Adjusted earnings per share came in at $6.42, a 6% decrease from the same period in the previous year and also below what analysts had predicted. The company's profitability also came under pressure, with its operating margin—a measure of efficiency—declining to 15.7% from 17.8% in the same quarter last year, indicating that expenses grew faster than sales. Adding to investor concerns, Chemed provided a full-year 2026 earnings forecast with a midpoint 6.5% below the existing analyst consensus. The combination of missing current estimates, declining profitability, and issuing cautious guidance prompted the significant drop in the stock price.
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What Is The Market Telling Us
Chemed’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. Moves this big are rare for Chemed and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 8 months ago when the stock dropped 14.7% on the news that the company provided a negative update on its full-year 2025 guidance, citing issues with its VITAS hospice business. The company announced that it now anticipates a significant Medicare Cap revenue limitation for its VITAS subsidiary in Florida. Specifically, Chemed projects a shortfall of $18 million to $25 million for the 2025 fiscal year ending in September, a reversal from previous expectations of having a cushion. The company pointed to weaker-than-expected Medicare admissions in April and May as the primary cause. Adding to concerns, Chemed also noted unexpected weakness in the residential demand for its Roto-Rooter plumbing services during the second quarter.
Chemed is down 8.4% since the beginning of the year, and at $388.10 per share, it is trading 37.3% below its 52-week high of $619.21 from April 2025. Investors who bought $1,000 worth of Chemed’s shares 5 years ago would now be looking at an investment worth $871.71.
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