As of June 9, 2025, Chemed Corp has a Discounted Cash Flow (DCF) derived fair value of $815.93 per share. With the current market price at $562.41, this represents a potential upside of 45.1%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $648.88 |
| DCF Fair Value (10-year) | $815.93 |
| Potential Upside (5-year) | 15.4% |
| Potential Upside (10-year) | 45.1% |
| Discount Rate (WACC) | 5.5% - 7.9% |
Revenue is projected to grow from $2431 million in 12-2024 to $4633 million by 12-2034, representing a compound annual growth rate of approximately 6.7%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 2431 | 7% |
| 12-2025 | 2654 | 9% |
| 12-2026 | 2830 | 7% |
| 12-2027 | 3003 | 6% |
| 12-2028 | 3084 | 3% |
| 12-2029 | 3261 | 6% |
| 12-2030 | 3510 | 8% |
| 12-2031 | 3724 | 6% |
| 12-2032 | 4080 | 10% |
| 12-2033 | 4307 | 6% |
| 12-2034 | 4633 | 8% |
Net profit margin is expected to improve from 12% in 12-2024 to 17% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 302 | 12% |
| 12-2025 | 361 | 14% |
| 12-2026 | 412 | 15% |
| 12-2027 | 466 | 16% |
| 12-2028 | 507 | 16% |
| 12-2029 | 566 | 17% |
| 12-2030 | 610 | 17% |
| 12-2031 | 647 | 17% |
| 12-2032 | 709 | 17% |
| 12-2033 | 748 | 17% |
| 12-2034 | 805 | 17% |
with a 5-year average of $56 million. Projected CapEx is expected to maintain at approximately 3% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 58 |
| 12-2026 | 61 |
| 12-2027 | 65 |
| 12-2028 | 69 |
| 12-2029 | 76 |
| 12-2030 | 80 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 26 |
| Days Inventory | 3 |
| Days Payables | 11 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 386 | 82 | 51 | 12 | 241 |
| 2026 | 584 | 126 | 72 | 17 | 369 |
| 2027 | 657 | 142 | 77 | 6 | 432 |
| 2028 | 715 | 155 | 79 | 7 | 474 |
| 2029 | 798 | 173 | 84 | 12 | 530 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 648.88 | 15.4% |
| 10-Year DCF (Growth) | 815.93 | 45.1% |
| 5-Year DCF (EBITDA) | 681.89 | 21.2% |
| 10-Year DCF (EBITDA) | 851.63 | 51.4% |
Is Chemed Corp (CHE) a buy or a sell? Chemed Corp is definitely a buy. Based on our DCF analysis, Chemed Corp (CHE) appears to be significantly undervalued with upside potential of 45.1%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $562.41.