Chemed Stock Crashes: What’s Dragging the Healthcare Giant Down in July 2025?
Another day, another Wall Street casualty. Chemed (NYSE: CHE) just joined the club—shares are nosediving as we speak. Here's the autopsy.
The Bloodbath Breakdown
No fancy footwork here—just a straight-up freefall. The healthcare services stock got caught in the perfect storm of sector rotation and earnings jitters. Classic case of 'sell first, ask questions later.'
Institutional Investors Bailing
Big money's voting with its feet. Volume spiked 300% above average as pension funds and ETFs dumped positions. Because nothing says 'confidence' like a herd of suits rushing for the exits.
Technical Support? What Technical Support?
The stock sliced through its 200-day MA like a hot knife through butter. Chartists are calling it a 'death cross'—because Wall Street loves nothing more than apocalyptic terminology with your morning coffee.
The Silver Lining Playbook
Fundamentalists whisper about oversold conditions and that sweet 3.8% dividend yield. But let's be real—when the algos start puking positions, your 'valuation metrics' might as well be horoscope readings.
Bottom line: In today's market, even stodgy healthcare stocks aren't safe from the casino mentality. Maybe they should've tokenized their hospice business on Ethereum—at least then the volatility would make sense.
Chemed's challenging quarter
From a revenue perspective, Chemed's Q2 was relatively steady. However, each business segment faced profitability issues.
Vitas grew revenue by 4%, but faced Medicare cap billing limitations that caused earnings to drop by 24%. Even excluding these as theoretical one-time impacts (though it is more of a continuous cycle thanks to working in a highly regulated industry), Vitas's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was flat for the quarter.
Image source: Getty Images.
Meanwhile, Chemed's typically steady-Eddie Roto-Rooter business only eked out 1% sales growth alongside a hefty 20% decline in net income. Much of this decrease stems from increased pressure on its marketing costs.
Management referenced-owned Google search during the earnings call, explaining:
They're saying if we can get money for making them pay for advertisers, we'll make sure they don't show up in the free areas. We deal with it. It's a bit of an adjustment for us.
Though Roto-Rooter remains the largest plumbing company in North America, this issue needs to be monitored by investors.
Ultimately, Chemed has a lot to sort out, but at just 20 times free cash flow, it could be a turnaround story.
