Chemed's VITAS Hospice Unit Drives Strong Q2 Growth Amid Roto-Rooter Stagnation
Event summary
- Chemed's Q2 2026 revenue increased by 8.8% to $673.3 million, with GAAP EPS up 43.7% to $5.13.
- VITAS segment saw net patient revenue rise 11.9%, driven by a 6.1% increase in days-of-care and higher Medicare reimbursement rates.
- Roto-Rooter's revenue grew 3.3%, but EBITDA margin declined by 77 basis points to 21.1%.
- Chemed repurchased 210,000 shares for $89.8 million in Q2, reducing outstanding shares by 10.5% over the trailing 12 months.
The big picture
Chemed's strong Q2 performance was primarily driven by its VITAS hospice unit, which benefited from higher Medicare reimbursement rates and increased days-of-care. The Roto-Rooter segment, however, showed signs of stagnation with flat EBITDA. This dual-segment dynamic highlights the company's reliance on healthcare services for growth amid regulatory pressures.
What we're watching
- Regulatory Impact
- How VITAS' Medicare Cap billing limitation will affect future revenue growth.
- Segment Performance
- Whether Roto-Rooter can improve its EBITDA margin amid stagnant growth.
- Shareholder Returns
- The pace at which Chemed continues share repurchases and their impact on stock price.