Healthcare services company Chemed Corporation (NYSE: CHE) beat Wall Street’s revenue expectations in Q1 CY2026, with sales up 1.6% year on year to $657.5 million. Its non-GAAP profit of $5.65 per share was 6.6% above analysts’ consensus estimates.

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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

Reviewing a company’s long-term sales performance reveals insights into its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Unfortunately, Chemed’s 4% annualized revenue growth over the last five years was tepid. This fell short of our benchmark 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 5.2% over the last two years is above its five-year trend, which is encouraging.

We can dig further into the company’s revenue dynamics by analyzing its number of billable days, which reached 2.05 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 modest year-on-year revenue growth of 1.6% but beat Wall Street’s estimates by 1.2%.

Looking ahead, sell-side analysts expect revenue to grow 6.8% over the next 12 months, an improvement versus the last two years. This projection is above the sector average and implies its newer products and services will spur better top-line performance.

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Adjusted Operating Margin

Chemed has managed its cost base well over the last five years. It demonstrated solid profitability for a healthcare business, producing an average adjusted operating margin of 15%.

Analyzing the trend in its profitability, Chemed’s adjusted operating margin decreased by 3.2 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 Q1, Chemed generated an adjusted operating margin profit margin of 14.3%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

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 2.8% 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 Q1, Chemed reported adjusted EPS of $5.65, up from $5.63 in the same quarter last year. This print beat analysts’ estimates by 6.6%. Over the next 12 months, Wall Street expects Chemed’s full-year EPS of $21.61 to grow 14.8%.

Key Takeaways from Chemed’s Q1 Results

It was good to see Chemed beat analysts’ EPS expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. Overall, this print had some key positives. The stock traded up 10.2% to $422.53 immediately following the results.

Indeed, Chemed had a rock-solid quarterly earnings result, but is this stock a good investment here? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).