Chemed Earnings Preview

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Investors braced for a bumpy ride ahead of Chemed's (NYS: CHE) earnings announcement as the company has wavered between beating and falling short of analyst predictions during the past fiscal year. The company will unveil its latest earnings on Tuesday, February 14. Chemed, through its subsidiaries, provides hospice services for patients and repair and maintenance services to residential and commercial accounts using the Roto-Rooter registered service mark.

What analysts say:

  • Buy, sell, or hold?: Half of analysts think investors should stand pat on Chemed. Analysts like Chemed better than competitor Amedisys overall. One out of 11 analysts rate Amedisys a buy compared to two of six for Chemed. Analysts still rate the stock a Hold, but they are a bit more wary about it compared to three months ago.
  • Revenue Forecasts: On average, analysts predict $353.5 million in revenue this quarter. That would represent a rise of 5.1% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $1.30 per share. Estimates range from $1.22 to $1.41.

What our community says:
CAPS All-Stars are solidly backing the stock, with 94.1% assigning it an "outperform" rating. The community at large is in line with the All-Stars, with 87.1% awarding it a rating of "outperform." Fools are bullish on Chemed, though the message boards have been quiet lately with only 36 posts in the past 30 days. Chemed's bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

Management:
Chemed's profit has risen year-over-year by an average of 7.8% over the past five quarters. Revenue has now gone up for three straight quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins serve as an illustration of how efficiently a company captures portions of sales dollars. Chemed's gross margins have been decreasing year-over-year for the last four quarters. Gross margins reflect the total sales revenue retained after costs. Here are Chemed's reported margins for the last four quarters: 

QuarterQ3Q2Q1Q4
Gross Margin28.2%28.1%28.2%30%
Operating Margin12.1%10.8%9.2%11.4%
Net Margin6.4%6.1%5.5%6.7%

For all our Chemed-specific analysis, including earnings and beyond, add Chemed to My Watchlist.

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Earnings estimates provided by Zacks.

At the time this article was published

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