Chemed Corporation (CHE) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Chemed Corporation (CHE)

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Intrinsic Value (DCF)

Current$458.93

→

Intrinsic$449.15

-2%

$308.06$449.15$717.36

Market implies 9% growth for 5 years

Growth 8%

Discount 10%

Terminal 3%

CHE appears fairly valued — current price aligns with our DCF estimate.

At $459, the market prices in 9% annual cash flow growth — a moderate expectation aligned with historical trends (8%).

Range: Bear $308 → Bull $717. Current price implies expectations near the base case.

Discount ↓Growth →	4%	6%	8%	10%
8%	$533	$581	$633	$688
10%	$380	$414	$449	$487
12%	$296	$321	$347	$376
14%	$242	$262	$283	$305

Bull Case

Bull case ($717) offers 56% upside at 10% growth, 9% discount
Conservative 8% growth assumption is achievable based on track record

Bear Case

Bear case ($308) implies 33% downside at 7% growth, 12% discount

Intrinsic Value vs Current Price

5-Year Cash Flow Projection

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5-Year Free Cash Flow Projection

Year 1$398.75M

Year 2$432.11M

Year 3$468.25M

Year 4$507.43M

Year 5$549.88M

Terminal$8.09B

📐 Model Inputs

Growth Rate8.4%5Y CAGR (cascade: 5Y→3Y→TTM)

Discount Rate10.0%WACC estimate

Terminal Growth3.0%Perpetuity rate

Base Free Cash Flow$367.97MTTM actual

Bear g×0.8, r+2%

Base Historical CAGR

Bull g×1.2, r−1.5%

ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

Frequently Asked Questions

Is CHE stock undervalued or overvalued?

🟡 FAIRLY VALUED

CHE trades at $458.93, within 10% of our $449.15 intrinsic value estimate. At 10.0% WACC and 8.4% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $324.99 (bear) to $615.75 (bull).

What is CHE's intrinsic value?

Using a 5-year DCF model: Base FCF of $368M, projected at 8.4% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $-38M net debt and dividing by 0.02B shares: Bear $324.99 | Base $449.15 | Bull $615.75. Current price $458.93 implies +2% to base case.

How is CHE's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 8.4% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($6.78B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 18.4x.

Chemed Corporation (CHE) Intrinsic Value