CHE Should I Buy
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Chemed Corp (CHE) is not a good buy at the moment for a beginner investor with a long-term strategy. The stock has experienced a significant decline in price due to weak Q4 financial performance, negative analyst sentiment, and increased hedge fund selling. Despite being oversold technically, there are no strong positive catalysts or proprietary trading signals to justify an immediate investment.
The stock is in a bearish trend with MACD showing negative expansion (-4.104), RSI at 12.719 indicating oversold conditions, and moving averages converging. The price is below key support levels, with S1 at 406.493 and S2 at 383.747, suggesting further downside risk.
The VITAS segment showed a 6% increase in admissions, and the company projected revenue growth for both VITAS and Roto-Rooter in 2026.
The company reported a significant earnings miss in Q4 2025, with revenue, net income, EPS, and gross margin all declining YoY. Shares dropped 15.1% to a 52-week low. Hedge funds are selling heavily, and Jefferies downgraded the stock with a reduced price target, citing margin headwinds and limited growth visibility. Additionally, legal investigations into potential violations by executives are ongoing.
In Q4 2025, revenue dropped by -0.10% YoY to $639.3M, net income fell by -15.02% YoY to $76.75M, EPS decreased by -9.12% YoY to $5.48, and gross margin declined by -5.54% YoY to 32.22%.
Jefferies downgraded the stock from Buy to Hold with a reduced price target of $475 (down from $550), citing persistent margin headwinds and limited growth visibility.
