Why Chemed (CHE) Shares Are Sliding Today

Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at AdaptHealth and its peers.

The senior health, home care, and hospice care industries provide essential services to aging populations and patients with chronic or terminal conditions. These companies benefit from stable, recurring revenue driven by relationships with patients and families that can extend many months or even years. However, the labor-intensive nature of the business makes it vulnerable to rising labor costs and staffing shortages, while profitability is constrained by reimbursement rates from Medicare, Medicaid, and private insurers.Looking ahead, the industry is positioned for tailwinds from an aging population, increasing chronic disease prevalence, and a growing preference for personalized in-home care. Advancements in remote monitoring and telehealth are expected to enhance efficiency and care delivery. However, headwinds such as labor shortages, wage inflation, and regulatory uncertainty around reimbursement could pose challenges. Investments in digitization and technology-driven care will be critical for long-term success.

The 7 senior health, home health & hospice stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 1.7%.

Luckily, senior health, home health & hospice stocks have performed well with share prices up 12% on average since the latest earnings results.

AdaptHealth

With a network of approximately 680 locations serving patients across all 50 states, AdaptHealth provides home medical equipment, supplies, and related services to patients with chronic conditions like sleep apnea, diabetes, and respiratory disorders.

AdaptHealth reported revenues of $820.3 million, up 1.8% year on year. This print exceeded analysts’ expectations by 2.5%. Overall, it was a satisfactory quarter for the company with a solid beat of analysts’ revenue estimates but full-year revenue guidance meeting analysts’ expectations.

AdaptHealth delivered the slowest revenue growth of the whole group. Interestingly, the stock is up 10.7% since reporting and currently trades at $10.07.

Best Q3: BrightSpring Health Services

Founded in 1974, BrightSpring Health Services offers home health care, hospice, neuro-rehabilitation, and pharmacy services.

BrightSpring Health Services reported revenues of $3.33 billion, up 14.7% year on year, outperforming analysts’ expectations by 5.3%. The business had a very strong quarter with an impressive beat of analysts’ revenue and EPS estimates.

BrightSpring Health Services delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 21.8% since reporting. It currently trades at $41.41.

Brookdale

With a network of over 650 communities serving approximately 59,000 residents across 41 states, Brookdale Senior Living operates senior living communities across the United States, offering independent living, assisted living, memory care, and continuing care retirement communities.

Brookdale reported revenues of $813.2 million, up 3.7% year on year, falling short of analysts’ expectations by 1.7%. It was a softer quarter as it posted a significant miss of analysts’ EPS and revenue estimates.

Brookdale delivered the weakest performance against analyst estimates in the group. Interestingly, the stock is up 28.1% since the results and currently trades at $11.67.

Read our full analysis of Brookdale’s results here.

The Pennant Group

Spun off from The Ensign Group in 2019 to focus on non-skilled nursing healthcare services, Pennant Group operates home health, hospice, and senior living facilities across 13 western and midwestern states, serving patients of all ages including seniors.

The Pennant Group reported revenues of $227.4 million, up 25.9% year on year. This result topped analysts’ expectations by 2.5%. It was a very strong quarter as it also produced full-year revenue guidance exceeding analysts’ expectations and an impressive beat of analysts’ revenue estimates.

The Pennant Group scored the fastest revenue growth and highest full-year guidance raise among its peers. The stock is up 13.5% since reporting and currently trades at $28.58.

Read our full, actionable report on The Pennant Group here, it’s free for active Edge members.

Chemed

With a unique business model combining end-of-life care and household services, Chemed operates two distinct businesses: VITAS, which provides hospice care for terminally ill patients, and Roto-Rooter, which offers plumbing and water restoration services.

Chemed reported revenues of $624.9 million, up 3.1% year on year. This number was in line with analysts’ expectations. Taking a step back, it was a slower quarter as it logged a significant miss of analysts’ EPS estimates and revenue in line with analysts’ estimates.

The stock is up 2.6% since reporting and currently trades at $450.62.

Read our full, actionable report on Chemed here, it’s free for active Edge members.

As the Q3 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the senior health, home health & hospice industry, including Chemed and its peers.

The senior health, home care, and hospice care industries provide essential services to aging populations and patients with chronic or terminal conditions. These companies benefit from stable, recurring revenue driven by relationships with patients and families that can extend many months or even years. However, the labor-intensive nature of the business makes it vulnerable to rising labor costs and staffing shortages, while profitability is constrained by reimbursement rates from Medicare, Medicaid, and private insurers.Looking ahead, the industry is positioned for tailwinds from an aging population, increasing chronic disease prevalence, and a growing preference for personalized in-home care. Advancements in remote monitoring and telehealth are expected to enhance efficiency and care delivery. However, headwinds such as labor shortages, wage inflation, and regulatory uncertainty around reimbursement could pose challenges. Investments in digitization and technology-driven care will be critical for long-term success.

The 7 senior health, home health & hospice stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 1.8%.

In light of this news, share prices of the companies have held steady as they are up 4.6% on average since the latest earnings results.

Chemed

With a unique business model combining end-of-life care and household services, Chemed operates two distinct businesses: VITAS, which provides hospice care for terminally ill patients, and Roto-Rooter, which offers plumbing and water restoration services.

Chemed reported revenues of $624.9 million, up 3.1% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with a significant miss of analysts’ EPS estimates and revenue in line with analysts’ estimates.

The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $441.72.

Read our full report on Chemed here, it’s free for active Edge members.

Best Q3: The Pennant Group

Spun off from The Ensign Group in 2019 to focus on non-skilled nursing healthcare services, Pennant Group operates home health, hospice, and senior living facilities across 13 western and midwestern states, serving patients of all ages including seniors.

The Pennant Group reported revenues of $229 million, up 26.8% year on year, outperforming analysts’ expectations by 3%. The business had a very strong quarter with full-year revenue guidance exceeding analysts’ expectations and an impressive beat of analysts’ revenue estimates.

The Pennant Group achieved the fastest revenue growth and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 5.9% since reporting. It currently trades at $26.67.

Is now the time to buy The Pennant Group? Access our full analysis of the earnings results here, it’s free for active Edge members.

Brookdale

With a network of over 650 communities serving approximately 59,000 residents across 41 states, Brookdale Senior Living operates senior living communities across the United States, offering independent living, assisted living, memory care, and continuing care retirement communities.

Brookdale reported revenues of $813.2 million, up 3.7% year on year, falling short of analysts’ expectations by 1.7%. It was a softer quarter as it posted a significant miss of analysts’ EPS estimates and a miss of analysts’ revenue estimates.

Brookdale delivered the weakest performance against analyst estimates in the group. Interestingly, the stock is up 19% since the results and currently trades at $10.85.

Read our full analysis of Brookdale’s results here.

Addus HomeCare

Serving approximately 66,000 clients across 22 states with a focus on "dual eligible" Medicare and Medicaid beneficiaries, Addus HomeCare provides in-home personal care, hospice, and home health services to elderly, chronically ill, and disabled individuals.

Addus HomeCare reported revenues of $362.3 million, up 25% year on year. This print topped analysts’ expectations by 2.2%. It was a strong quarter as it also put up a solid beat of analysts’ revenue estimates and a beat of analysts’ EPS estimates.

The stock is down 4.7% since reporting and currently trades at $113.40.

Read our full, actionable report on Addus HomeCare here, it’s free for active Edge members.

BrightSpring Health Services

Founded in 1974, BrightSpring Health Services offers home health care, hospice, neuro-rehabilitation, and pharmacy services.

BrightSpring Health Services reported revenues of $3.33 billion, up 14.7% year on year. This number beat analysts’ expectations by 5.3%. Overall, it was a very strong quarter as it also produced a solid beat of analysts’ revenue estimates and a beat of analysts’ EPS estimates.

BrightSpring Health Services achieved the biggest analyst estimates beat but had the weakest full-year guidance update among its peers. The stock is up 2% since reporting and currently trades at $34.67.

Read our full, actionable report on BrightSpring Health Services here, it’s free for active Edge members.

What Happened?

A number of stocks jumped in the afternoon session after comments from a key Federal Reserve official bolstered hopes for an interest rate cut. New York Federal Reserve President John Williams stated he sees “room for a further adjustment” in the near term, sparking a significant market rally. Following his remarks, the probability of the central bank cutting rates at its December meeting jumped from 39% to over 73%, according to the CME FedWatch tool. This positive sentiment provided relief to markets amid concerns over high valuations, particularly in AI-related stocks.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Immuno-Oncology company Natera jumped 3.2%. Is now the time to buy Natera? Access our full analysis report here, it’s free for active Edge members.
• Generic Pharmaceuticals company Amneal jumped 3%. Is now the time to buy Amneal? Access our full analysis report here, it’s free for active Edge members.
• Senior Health, Home Health & Hospice company Chemed jumped 3.2%. Is now the time to buy Chemed? Access our full analysis report here, it’s free for active Edge members.
• Senior Health, Home Health & Hospice company The Pennant Group jumped 3%. Is now the time to buy The Pennant Group? Access our full analysis report here, it’s free for active Edge members.
• Hospital Chains company HCA Healthcare jumped 3.3%. Is now the time to buy HCA Healthcare? Access our full analysis report here, it’s free for active Edge members.

Zooming In On HCA Healthcare (HCA)

HCA Healthcare’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 2 months ago when the stock dropped 4.4% on the news that markets pulled back, reversing early gains, as investor sentiment remained cautious despite a softer-than-expected inflation reading. Stocks rose in the morning session after an unexpected drop in the Producer Price Index (PPI) for August signaled easing inflation and raised expectations for a potential Federal Reserve interest rate cut. The U.S. Bureau of Labor Statistics reported that the PPI, which measures wholesale prices, edged down 0.1% the previous month, contrary to analyst expectations for a 0.3% rise. This data gives the Federal Reserve more flexibility to consider lowering interest rates to stimulate the economy.

HCA Healthcare is up 65% since the beginning of the year, and at $491.23 per share, has set a new 52-week high. Investors who bought $1,000 worth of HCA Healthcare’s shares 5 years ago would now be looking at an investment worth $3,288.

The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how senior health, home health & hospice stocks fared in Q3, starting with Chemed .

The senior health, home care, and hospice care industries provide essential services to aging populations and patients with chronic or terminal conditions. These companies benefit from stable, recurring revenue driven by relationships with patients and families that can extend many months or even years. However, the labor-intensive nature of the business makes it vulnerable to rising labor costs and staffing shortages, while profitability is constrained by reimbursement rates from Medicare, Medicaid, and private insurers.Looking ahead, the industry is positioned for tailwinds from an aging population, increasing chronic disease prevalence, and a growing preference for personalized in-home care. Advancements in remote monitoring and telehealth are expected to enhance efficiency and care delivery. However, headwinds such as labor shortages, wage inflation, and regulatory uncertainty around reimbursement could pose challenges. Investments in digitization and technology-driven care will be critical for long-term success.

The 7 senior health, home health & hospice stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 1.8%.

In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.

Chemed

With a unique business model combining end-of-life care and household services, Chemed operates two distinct businesses: VITAS, which provides hospice care for terminally ill patients, and Roto-Rooter, which offers plumbing and water restoration services.

Chemed reported revenues of $624.9 million, up 3.1% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with a significant miss of analysts’ EPS estimates and revenue in line with analysts’ estimates.

Unsurprisingly, the stock is down 2.2% since reporting and currently trades at $429.31.

Read our full report on Chemed here, it’s free for active Edge members.

Best Q3: The Pennant Group

Spun off from The Ensign Group in 2019 to focus on non-skilled nursing healthcare services, Pennant Group operates home health, hospice, and senior living facilities across 13 western and midwestern states, serving patients of all ages including seniors.

The Pennant Group reported revenues of $229 million, up 26.8% year on year, outperforming analysts’ expectations by 3%. The business had a very strong quarter with full-year revenue guidance exceeding analysts’ expectations and an impressive beat of analysts’ revenue estimates.

The Pennant Group achieved the fastest revenue growth and highest full-year guidance raise among its peers. The market seems content with the results as the stock is up 2.9% since reporting. It currently trades at $25.90.

Is now the time to buy The Pennant Group? Access our full analysis of the earnings results here, it’s free for active Edge members.

Brookdale

With a network of over 650 communities serving approximately 59,000 residents across 41 states, Brookdale Senior Living operates senior living communities across the United States, offering independent living, assisted living, memory care, and continuing care retirement communities.

Brookdale reported revenues of $813.2 million, up 3.7% year on year, falling short of analysts’ expectations by 1.7%. It was a softer quarter as it posted a significant miss of analysts’ EPS estimates and a miss of analysts’ revenue estimates.

Brookdale delivered the weakest performance against analyst estimates in the group. Interestingly, the stock is up 15% since the results and currently trades at $10.48.

Read our full analysis of Brookdale’s results here.

Addus HomeCare

Serving approximately 66,000 clients across 22 states with a focus on "dual eligible" Medicare and Medicaid beneficiaries, Addus HomeCare provides in-home personal care, hospice, and home health services to elderly, chronically ill, and disabled individuals.

Addus HomeCare reported revenues of $362.3 million, up 25% year on year. This result topped analysts’ expectations by 2.2%. It was a strong quarter as it also recorded an impressive beat of analysts’ revenue estimates and a beat of analysts’ EPS estimates.

The stock is down 7.4% since reporting and currently trades at $110.16.

Read our full, actionable report on Addus HomeCare here, it’s free for active Edge members.

BrightSpring Health Services

Founded in 1974, BrightSpring Health Services offers home health care, hospice, neuro-rehabilitation, and pharmacy services.

BrightSpring Health Services reported revenues of $3.33 billion, up 14.7% year on year. This print surpassed analysts’ expectations by 5.3%. Overall, it was a very strong quarter as it also put up a solid beat of analysts’ revenue estimates and a beat of analysts’ EPS estimates.

BrightSpring Health Services achieved the biggest analyst estimates beat but had the weakest full-year guidance update among its peers. The stock is down 4.9% since reporting and currently trades at $32.35.

Read our full, actionable report on BrightSpring Health Services here, it’s free for active Edge members.

The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Brookdale and the rest of the senior health, home health & hospice stocks fared in Q3.

The senior health, home care, and hospice care industries provide essential services to aging populations and patients with chronic or terminal conditions. These companies benefit from stable, recurring revenue driven by relationships with patients and families that can extend many months or even years. However, the labor-intensive nature of the business makes it vulnerable to rising labor costs and staffing shortages, while profitability is constrained by reimbursement rates from Medicare, Medicaid, and private insurers.Looking ahead, the industry is positioned for tailwinds from an aging population, increasing chronic disease prevalence, and a growing preference for personalized in-home care. Advancements in remote monitoring and telehealth are expected to enhance efficiency and care delivery. However, headwinds such as labor shortages, wage inflation, and regulatory uncertainty around reimbursement could pose challenges. Investments in digitization and technology-driven care will be critical for long-term success.

The 7 senior health, home health & hospice stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 1.8%.

In light of this news, share prices of the companies have held steady as they are up 2.1% on average since the latest earnings results.

Brookdale

With a network of over 650 communities serving approximately 59,000 residents across 41 states, Brookdale Senior Living operates senior living communities across the United States, offering independent living, assisted living, memory care, and continuing care retirement communities.

Brookdale reported revenues of $813.2 million, up 3.7% year on year. This print fell short of analysts’ expectations by 1.7%. Overall, it was a softer quarter for the company with a significant miss of analysts’ EPS estimates and a miss of analysts’ revenue estimates.

"Brookdale's solid third quarter results highlight the underlying strength of our company amidst the accelerating tailwind from increasing demand for senior living coupled with suppressed inventory growth," said Nick Stengle, Brookdale's Chief Executive Officer.

Brookdale delivered the weakest performance against analyst estimates of the whole group. Interestingly, the stock is up 15.2% since reporting and currently trades at $10.52.

Read our full report on Brookdale here, it’s free for active Edge members.

Best Q3: The Pennant Group

Spun off from The Ensign Group in 2019 to focus on non-skilled nursing healthcare services, Pennant Group operates home health, hospice, and senior living facilities across 13 western and midwestern states, serving patients of all ages including seniors.

The Pennant Group reported revenues of $229 million, up 26.8% year on year, outperforming analysts’ expectations by 3%. The business had a very strong quarter with full-year revenue guidance exceeding analysts’ expectations and a solid beat of analysts’ revenue estimates.

The Pennant Group achieved the fastest revenue growth and highest full-year guidance raise among its peers. However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $25.25.

Is now the time to buy The Pennant Group? Access our full analysis of the earnings results here, it’s free for active Edge members.

Chemed

With a unique business model combining end-of-life care and household services, Chemed operates two distinct businesses: VITAS, which provides hospice care for terminally ill patients, and Roto-Rooter, which offers plumbing and water restoration services.

Chemed reported revenues of $624.9 million, up 3.1% year on year, in line with analysts’ expectations. It was a slower quarter as it posted a significant miss of analysts’ EPS estimates and revenue in line with analysts’ estimates.

Interestingly, the stock is up 1.9% since the results and currently trades at $447.40.

Read our full analysis of Chemed’s results here.

BrightSpring Health Services

Founded in 1974, BrightSpring Health Services offers home health care, hospice, neuro-rehabilitation, and pharmacy services.

BrightSpring Health Services reported revenues of $3.33 billion, up 14.7% year on year. This number surpassed analysts’ expectations by 5.3%. Overall, it was a very strong quarter as it also produced a solid beat of analysts’ revenue estimates and a beat of analysts’ EPS estimates.

BrightSpring Health Services scored the biggest analyst estimates beat but had the weakest full-year guidance update among its peers. The stock is flat since reporting and currently trades at $33.73.

Read our full, actionable report on BrightSpring Health Services here, it’s free for active Edge members.

Addus HomeCare

Serving approximately 66,000 clients across 22 states with a focus on "dual eligible" Medicare and Medicaid beneficiaries, Addus HomeCare provides in-home personal care, hospice, and home health services to elderly, chronically ill, and disabled individuals.

Addus HomeCare reported revenues of $362.3 million, up 25% year on year. This print beat analysts’ expectations by 2.2%. It was a strong quarter as it also recorded an impressive beat of analysts’ revenue estimates and a beat of analysts’ EPS estimates.

The stock is down 4.3% since reporting and currently trades at $113.76.

Read our full, actionable report on Addus HomeCare here, it’s free for active Edge members.

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.