Healthcare services company Chemed Corporation (NYSE: CHE) reported revenue ahead of Wall Street’s expectations in Q2 CY2026, with sales up 8.8% year on year to $673.3 million. Its non-GAAP profit of $6.06 per share was 8.2% above analysts’ consensus estimates.
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Chemed (CHE) Q2 CY2026 Highlights:
- Revenue: $673.3 million vs analyst estimates of $665 million (8.8% year-on-year growth, 1.2% beat)
- Adjusted EPS: $6.06 vs analyst estimates of $5.60 (8.2% beat)
- Adjusted EBITDA: $121.8 million vs analyst estimates of $116.8 million (18.1% margin, 4.3% beat)
- Adjusted EPS guidance for the full year is $25.38 at the midpoint, beating analyst estimates by 4.2%
- Operating Margin: 13.2%, up from 11% in the same quarter last year
- Free Cash Flow Margin: 15.1%, down from 19.8% in the same quarter last year
- Sales Volumes rose 6.1% year on year, in line with the same quarter last year
- Market Capitalization: $6.73 billion
Company Overview
With a unique business model combining end-of-life care and household services, Chemed (NYSE: CHE) operates two distinct businesses: VITAS, which provides hospice care for terminally ill patients, and Roto-Rooter, which offers plumbing and water restoration services.
Revenue Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Unfortunately, Chemed’s 4.1% annualized revenue growth over the last five years was mediocre. This was below our standard for the healthcare sector and is a rough starting point for our analysis.
Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. Chemed’s annualized revenue growth of 5.4% over the last two years is above its five-year trend, which is encouraging. 
Chemed also reports its number of billable days, which reached 2.16 million in the latest quarter. Over the last two years, Chemed’s billable days averaged 6.4% year-on-year growth. Because this number is in line with its revenue growth, we can see the company kept its prices fairly consistent. 
This quarter, Chemed reported year-on-year revenue growth of 8.8%, and its $673.3 million of revenue exceeded Wall Street’s estimates by 1.2%.
Looking ahead, sell-side analysts expect revenue to grow 7% over the next 12 months, an improvement versus the last two years. This projection is above average for the sector and suggests its newer products and services will fuel better top-line performance.
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Adjusted Operating Margin
Chemed has done a decent job managing its cost base over the last five years. The company has produced an average adjusted operating margin of 15%, higher than the broader healthcare sector.
Analyzing the trend in its profitability, Chemed’s adjusted operating margin decreased by 3.6 percentage points over the last five years. The company’s two-year trajectory also shows it failed to get its profitability back to the peak as its margin fell by 1.6 percentage points. This performance was poor no matter how you look at it - it shows its expenses were rising and it couldn’t pass those costs onto its customers.
In Q2, Chemed generated an adjusted operating margin profit margin of 14.4%, up 3.4 percentage points year on year. This increase was a welcome development and shows it was more efficient.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Chemed’s unimpressive 4.2% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.
In Q2, Chemed reported adjusted EPS of $6.06, up from $4.27 in the same quarter last year. This print beat analysts’ estimates by 8.2%. Over the next 12 months, Wall Street expects Chemed’s full-year EPS to grow 9.4% from $23.40 to $25.61.
Key Takeaways from Chemed’s Q2 Results
We enjoyed seeing Chemed beat analysts’ full-year EPS guidance expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. Overall, we think this was a solid quarter with some key areas of upside. The stock remained flat at $515.01 immediately after reporting.
Big picture, is Chemed a buy here and now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).
