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Sunnyvale, California-based Ceribell, Inc. (NASDAQ:CBLL), a manufacturer of electromedical apparatus trading at $11.15 per share, disclosed today that the newly imposed U.S. tariffs on imported goods could affect its financials starting the fourth quarter of 2025. The stock has seen significant pressure recently, falling nearly 40% in the past week according to InvestingPro data. The company, which sources its headband product components from China, has estimated an 8 to 10 percentage point hit on its gross margins once current inventory runs out.
Ceribell's headband products are assembled by two contract manufacturers in China, with final quality checks and packaging done at its headquarters in Sunnyvale. Despite the tariffs, the company assured that its current inventory within the U.S. would be adequate to meet demand through the third quarter of 2025. The company operates on a first-in, first-out basis when accounting for product inventory cost of goods sold, which means the financial impact of the tariffs won't be felt until the existing inventory is depleted.
The company reported a total gross margin of 87% for the fiscal year ended December 31, 2024, maintaining its impressive profitability metrics. According to InvestingPro data, Ceribell achieved strong revenue growth of 45% in the last twelve months, generating total revenue of $65.4 million. The effective total tariff rate on goods sourced from China is currently 145%. Ceribell also stated that the tariffs would not impact the cost of revenue associated with its subscription products.
The forward-looking statements in Ceribell's SEC filing highlight the anticipated rate and impact of tariffs on the company's estimated gross margins and the supply duration of finished goods. For investors seeking deeper insights, InvestingPro offers comprehensive analysis with 12 additional ProTips and detailed financial metrics, including the company's Fair Value estimate and financial health scores. These statements are subject to various risks and uncertainties, including changes in the macroeconomic and geopolitical environment, new or higher tariffs, market acceptance of their products, competitive pressures, and the ability to adapt manufacturing and production capacities.
Investors are cautioned that these forward-looking statements involve risks and uncertainties, many of which are beyond the company's control, and actual results may differ materially. The company does not undertake any obligation to update these statements in the event of new information or future developments. This news is based on statements found in a recent SEC filing by Ceribell, Inc.
In other recent news, Ceribell Inc. reported a substantial 41% year-over-year revenue growth in the fourth quarter of 2024, reaching $18.5 million. Despite this impressive revenue increase, the company recorded a net loss of $12.6 million for the quarter. Looking forward, Ceribell projects its 2025 revenue to be between $81 million and $85 million, representing a growth rate of 24% to 30%. Canaccord Genuity maintained its Buy rating for Ceribell, highlighting the company's strong balance sheet and attractive valuation. The analysts noted that Ceribell's stock is trading at 2.7 times its projected 2025 enterprise value to sales ratio. In addition, Ceribell has announced executive compensation adjustments, with CEO Jane Chao's salary increasing to $685,000 and other executives receiving similar adjustments. These changes were part of the company's annual compensation review process. Ceribell also plans significant investments in research and development in 2025, focusing on expanding its product pipeline and market reach.
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