What Happened?

Shares of healthcare services company Chemed Corporation (NYSE: CHE) fell 14.7% in the afternoon session after the company provided a negative update on its full-year 2025 guidance, citing issues with its VITAS hospice business. 

The company announced that it now anticipates a significant Medicare Cap revenue limitation for its VITAS subsidiary in Florida. Specifically, Chemed projects a shortfall of $18 million to $25 million for the 2025 fiscal year ending in September, a reversal from previous expectations of having a cushion. The company pointed to weaker-than-expected Medicare admissions in April and May as the primary cause. 

Adding to concerns, Chemed also noted unexpected weakness in the residential demand for its Roto-Rooter plumbing services during the second quarter.

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What The Market Is Telling Us

Chemed’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. Moves this big are rare for Chemed and indicate this news significantly impacted the market’s perception of the business.

Chemed is down 9.5% since the beginning of the year, and at $478.04 per share, it is trading 22.8% below its 52-week high of $619.21 from April 2025. Investors who bought $1,000 worth of Chemed’s shares 5 years ago would now be looking at an investment worth $1,060.

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