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I considered veterinary services provider CVS Group (LSE:CVSG) to be a white-hot growth share when I invested back in 2020. However, news of an industry-wide review by the competition watchdog prompted me to sell up sooner than I’d hoped.
I didn’t appreciate the threat of a sector shake-up and what this could mean for earnings. I wasn’t alone, and sold my holdings in September 2023 as the CVS share price crashed.
I’m pleased I sold when I did, given the scale of the share price fall. At £14.28 per share today, CVS shares remain well below the £17.09 that I sold out at.
But the healthcare group has risen strongly in 2025, up 74% in the year to date. It’s risen an extra 2% today (15 October) after the Competition and Markets Authority (CMA) published provisional findings that were less damning than the industry had feared.
Can CVS shares continue climbing following the news? And should I consider re-adding this touted growth stock to my portfolio?
What has the CMA said?
The CMA launched its investigation over fears over pricing and transparency in the animalcare market.
To remedy a system it’s deemed “not fit for purpose“, the watchdog has proposed 21 provisional changes. These include requiring vets to publish comprehensive price lists, making it simpler for consumers to purchase medicines online, capping prescription prices, and requiring practices to state if they are part of a larger group.
Such changes would represent the largest overhaul of the industry to date. Yet they’re not as bad as the industry had feared, prompting CVS’s and Pets at Home‘s share prices to rise.
Analyst Charles Weston of RBC Capital notes that “there continues to be no enforced asset divestment, and a continued preference to focus on improved transparency in order to build a more competitive marketplace for veterinary pharmaceuticals, rather than any major focus on pricing controls“.
Is CVS a buy?
CVS itself said it welcomed “the additional certainty that this morning’s announcement brings“, noting that the 21 suggested reforms are seven below what was proposed in the spring.
Veterinary practitioners aren’t out of the woods just yet. The CMA’s final report isn’t due until March. However, substantial changes from what was touted today are highly unlikely.
So are CVS shares now a buy for growth investors? As the table shows, City brokers expect earnings to rise rapidly:
| Financial year to June | Expected earnings per share (EPS) | Annual growth |
|---|---|---|
| 2026 | 89.67p | 12% |
| 2027 | 97.57p | 9% |
| 2028 | 107.15p | 10% |
Forecasts are supported by signs the CMA will not impose price controls that crush margins. They also reflect the impressive progress CVS is making in Australia where rapid expansion is continuing.
That said, the firm faces signficant hurdles that may threaten these forecasts and weigh on its share price.
There is still some uncertainty over the watchdog’s final findings, which merits attention. CVS also faces sustained sales pressure in its core UK market as the cost-of-living crisis endures, and especially for its front-of-store products.
I’m also mindful of the firm’s growth prospects further out as labour costs steadily climb. And while the CMA’s recommendations could have been worse, it still potentially limits the company’s expansion opportunities at home.
Today’s news provides CVS with a welcome boost. But on balance, I’d still rather find other growth shares to buy.
