Two Stocks to Sell: GM and CGNX, One Stock to Buy: HCA Healthcare

This article discusses three stocks, one with lasting competitive advantages and two facing headwinds. General Motors (GM) and Cognex (CGNX) are stocks to sell due to disappointing sales, high capital intensity, and overleveraging. HCA Healthcare (HCA) is a stock to buy due to its massive revenue base, strong earnings growth, and increasing free cash flow margin.

In the second quarter of 2025, the financial landscape saw both promising and challenging performances among several key stocks. This article examines three companies: CAVA Group, Inc. (CAVA), Five Below, Inc. (FIVE), and EDAP TMS (EDAP). While CAVA and GM are facing significant headwinds, Five Below and EDAP TMS exhibit resilience and growth potential.

CAVA Group, Inc. (CAVA)
CAVA Group, Inc. (NYSE:CAVA) has experienced a tumultuous second quarter, with shares declining by 16.6% in August alone. Jim Cramer has repeatedly cited high menu prices as a primary reason for CAVA's struggles. The company's sales have been disappointing, leading to a year-to-date loss of 41% and a reduction in same-store sales growth guidance. Despite its potential, CAVA's high costs and menu prices make it an investment with limited upside and significant downside risk [1].

Five Below, Inc. (FIVE)
Five Below, Inc. (NASDAQ:FIVE) reported record sales of $1.03 billion in the second quarter of 2025, marking the first time the company surpassed $1 billion in sales outside the peak holiday period. The company's strong performance was driven by increased traffic, higher average unit retail (AUR), and effective merchandising, pricing, and marketing strategies. However, ongoing tariff-related headwinds and higher SG&A costs pose challenges to its margin expansion. Despite these pressures, Five Below's disciplined expense management and strong fixed cost leverage support its long-term profitability [2].

EDAP TMS
EDAP TMS reported a net loss of €5.6M and operating loss of €5.8M in the second quarter of 2025. However, the company achieved 76.8% HIFU revenue growth to €8.5M, driven by increased Focal One system sales. EDAP's strategy of prioritizing market dominance over short-term profits has led to a €36M low-cost EIB loan to accelerate prostate cancer treatment expansion and clinical development. Investors are closely watching to see if EDAP can sustain growth while transforming HIFU into a cash-positive business [3].

Conclusion
While CAVA Group, Inc. and GM face significant challenges, Five Below and EDAP TMS demonstrate resilience and growth potential. Investors should carefully evaluate each company's prospects and risks before making investment decisions.

References
[1] https://finviz.com/news/154344/jim-cramer-reveals-why-cava-group-inc-cava-is-struggling
[2] https://www.nasdaq.com/articles/five-below-q2-2025-sales-top-1-billion
[3] https://www.ainvest.com/news/edap-tms-q2-2025-earnings-bold-bet-hifu-future-term-costs-2508/