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 EUR 54.3m (eNuW: EUR 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. EUR 34m vs. EUR 49m in

Q1'25). Games revenue grew 14% yoy to EUR 3.9m, with MAU up 34% yoy to 35k as

the portfolio expanded to >740 titles (c.+80% yoy). ARPU of EUR 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 EUR 15.5m (eNuW: EUR 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 EUR 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 EUR 53.80, reflecting elevated D2C marketing activity for the charity

lotteries; the underlying CPL for the core brokerage business stood at EUR 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 EUR 10.5m billings at an ABPU of EUR 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 EUR 76m and could approach peak

levels within 2-3 weeks, which would mark the first peak of FY26.

Importantly, Q1 marketing of EUR 17.6m sits below the FY26 run-rate implied by

the EUR 85-95m guidance, leaving c. EUR 22-26m of quarterly marketing firepower

to deploy into more favourable jackpot environments.

Cash of EUR 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 EUR 80, based on DCF.

You can download the research here:

https://eqs-cockpit.com/c/fncls.ssp?u=f79fb72e305f1c490e99754af4a7308c

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

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.

The EQS Distribution Services include Regulatory Announcements,

Financial/Corporate News and Press Releases.

View original content:

https://eqs-news.com/?origin_id=5e00f7ed-49dd-11f1-8534-027f3c38b923&lang=en

2322898 07.05.2026 CET/CEST

°