Ceribell, Inc. (CBLL, Financial) is witnessing a significant rise in its stock value following its latest announcement concerning the impact of recently imposed U.S. tariffs. According to the company's recent 8K filing, Ceribell anticipates that these tariffs will not materially affect its financial outcomes until the fourth quarter of 2025.
The medical device company, known for its headband product, sources components from two Chinese contract manufacturers. The U.S. government has introduced extensive tariffs on imported goods, prompting Ceribell to clarify that finished goods inventory within the United States as of April 2025 will sustain sufficient supply through the third quarter of 2025.
Currently, Ceribell utilizes a first-in, first-out accounting practice for product inventory costs, which reinforces its confidence in maintaining stable financial results despite the new tariffs. In 2024, the company recorded an impressive gross margin of 87%. However, after supplies are exhausted, the company anticipates its gross margins might be shaved by 8 to 10 percentage points due to an implemented total tariff rate of 145% on Chinese imports.
Crucially, Ceribell reassures that the additional tariffs will not affect the cost of revenue related to its subscription products, further stabilizing its market stance amidst these regulatory changes. Investors have reacted positively to this proactive disclosure, leading to the increased trading activity of Ceribell shares.
