VITAS Raises 2026 Earnings Guidance to $24.00 to $24.75 per Share
Consensus $23.88. The company said, "Historically, we do not give quarterly updates to guidance. Due to the materially improved performance of VITAS, coupled with the level of share repurchases in the first quarter of 2026, we believe updating guidance is appropriate in this instance. Further operational detail will be provided during the investor conference call. VITAS' initiatives to return to a normal growth pattern after managing the 2025 Medicare Cap issue were more quickly successful than originally anticipated. This led to higher revenue, excluding the impact of Medicare Cap, and adjusted EBITDA margins, excluding the impact of Medicare Cap, in the first quarter 2026 than what was included in the original guidance. As a result, anticipated ADC growth for 2026 is updated to a revised range of 4.5% to 5.5% compared to the original guidance range of 3.5% to 4.0%. Anticipated revenue growth, excluding the impact of the Medicare Cap, improves from the original guidance range of 5.5% to 6.5% to a revised range of 6.5% to 7.5%. Finally, revised EBITDA margin, excluding the impact of the Medicare Cap, is anticipated to be 18.0% to 18.5% compared to the original guidance of 17.5% to 18.5%. Roto-Rooter performed generally within our expectations. In total, there were various headwinds and tailwinds that contributed to the overall results in the first quarter of 2026. In the first quarter of 2026, unusual ice and snowstorms led to some level of service disruption for five days of the quarter across 24 Roto-Rooter branches. This resulted in an estimated loss of net revenue of between $3 million and $4 million in the quarter. Additionally, total leads for Roto-Rooter increased 3.3% during the quarter but continuing the previously discussed trends, a larger portion of those leads were the result of paid internet marketing. As a result, total marketing expense during the quarter exceeded our expectations by approximately $2.0 million. When factoring all the gives and takes within the expected Roto-Rooter performance for the remainder of fiscal 2026, anticipated revenue growth remains unchanged at 3.0% to 3.5%. Estimated adjusted EBITDA margin is lowered slightly to 21.5% to 22.5% compared to the original guidance range of 22.5% to 23.0%. This is primarily due to elevated marketing costs now expected to persist above our original guidance for the remainder of the year. Based on the above, full-year 2026 earnings per diluted share, excluding non-cash expenses for stock options, tax benefits from stock option exercises, costs related to litigation and other discrete items, is estimated to be in the range of $24.00 to $24.75. The mid-point of the revised guidance represents a 13% increase from 2025 adjusted earnings per diluted share of $21.55. The revised 2026 guidance assumes an effective corporate tax rate on adjusted earnings of 24.5% and a diluted share count of 13.6 million shares. The original 2026 guidance was for adjusted earnings per diluted share to be between $23.25 and $24.25."
