Original-Research: ZEAL Network SE (von NuWays AG): BUY

Classification of NuWays AG to ZEAL Network SE

Company Name:	ZEAL Network SE
ISIN:	DE000ZEAL241
Reason for the research:	Update
Recommendation:	BUY
Target price:	EUR 80
Target price on sight of:	12 months
Last rating change:
Analyst:	Simon Keller

Q1 review: Growth despite weak jackpots

Q1 results were largely in line with expectations (see p.2) and show that ZEAL continues to grow structurally even in an unfavourable jackpot environment. Importantly, the quarter underlines management’s willingness to step up marketing and diversification spend against a soft jackpot backdrop to build a materially larger earnings base over the coming years.

Q1 sales rose 6% yoy to € 54.3m (eNuW: € 55m), supported by a 5% increase in monthly active lottery users and a 0.7pp yoy improvement in the gross margin to 17.8%, partly driven by the higher-margin proprietary raffles. Lottery trading was held back by zero peak jackpots in both Lotto 6/49 and Eurojackpot and a weaker EJ jackpot environment (avg. € 34m vs. € 49m in Q1'25). Games revenue grew 14% yoy to € 3.9m, with MAU up 34% yoy to 35k as the portfolio expanded to >740 titles (c.+80% yoy). ARPU of € 37.41 (-15% yoy) reflects a tough Q1'25 comp that benefited from an unusually high share of large-ticket customers, and sits in line with the longer-term average.

EBITDA came in at € 15.5m (eNuW: € 15m), down 13% yoy, with the margin 1.2pp ahead of our estimate. The yoy decline reflects three drivers: (i) a tough comparable base, as Q1'25 benefited from strong new customer cohorts won during the exceptional Q4'24 jackpot run; (ii) deliberately stepped-up marketing spend (+13% yoy to € 17.6m) despite the weak jackpot backdrop, which still delivered 274k new registered customers (+11% yoy); and (iii) a 27% rise in headcount (240 to 305 FTE), mainly to build out Traumhausverlosung and the newly launched Traumautoverlosung. CPL rose 11% to € 53.80, reflecting elevated D2C marketing activity for the charity lotteries; the underlying CPL for the core brokerage business stood at € 46, broadly in line with FY25 levels.

In sum, ZEAL is still adding lottery users without jackpot support and diversification is becoming more visible. The Mallorca house (house 6) generated € 10.5m billings at an ABPU of € 27.48, up 16% from house 5, showing the format continues to improve on key engagement metrics. The 8th Traumhaus raffle is already running, and Traumautoverlosung's Season Zero marks the entry into premium-vehicle prizes, broadening the proprietary product suite (see our last update).

Looking ahead, the current Eurojackpot sits at € 76m and could approach peak levels within 2-3 weeks, which would mark the first peak of FY26. Importantly, Q1 marketing of € 17.6m sits below the FY26 run-rate implied by the € 85-95m guidance, leaving c. € 22-26m of quarterly marketing firepower to deploy into more favourable jackpot environments.

Cash of € 115m and a 53.8% equity ratio leave ample room for further capital returns, with buybacks being a potential catalyst beyond the proposed dividend. At c. 22x PPA-adjusted 2026e earnings and 34% below the 5-year EV/EBITDA median, valuation looks undemanding for a largely macro uncorrelated business with mid-teens growth and 30%+ EBITDA margins near-term.

BUY, PT € 80, based on DCF.

You can download the research here: zeal-network-se-2026-05-07-longupdate-en-08a7d
For additional information visit our website: https://www.nuways-ag.com/research-feed

Contact for questions:
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss bestimmter Börsengeschäfte.
Offenlegung möglicher Interessenkonflikte nach § 85 WpHG beim oben analysierten Unternehmen befindet sich in der vollständigen Analyse.
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