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Original-Research: ZEAL Network SE - from NuWays AG

26.03.2026 / 09:00 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS
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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

Marketing unlocks more growth potential, chg.

Q4 results, the FY'26 guidance and the new mid-term ambition all point to
the same conclusion: ZEAL has more near-term growth potential than
previously anticipated, unlockable through additional marketing spend while
keeping EBITDA margins around 30%. This is the key takeaway from the release
and fully supports our BUY recommendation.

ZEAL exceeded the implied Q4 guidance upper range on both sales (EUR 55.9m, vs
guided EUR 52.4m) and EBITDA (EUR 14.7m, vs. guided EUR 13.9m; see p. 2 for
details). We attribute this to strong marketing efficiency, as the jackpot
environment offered no support (0 jackpots in Q4). Cost per lead remained
roughly stable at c. EUR 46 compared to other low jackpot phases (e.g. 9M'25
or FY'23), despite costlier in-house raffle ads for Traumhausverlosung
(eNuW), pointing to continued capacity to deploy higher spend efficiently.

Importantly, higher marketing spend should be value accretive, in our view,
as it enables ZEAL to acquire customers early in the ongoing online
migration and further consolidate its leadership. Marketing spend remains
disciplined by internal KPIs such as a 2-3 year payback period and customer
lifetime values. With c. 60% of billings subscription based, each newly
acquired customer strengthens the recurring revenue base and supports
meaningful margin upside once growth spending normalises.

The FY'26 guidance implies c. 17% yoy sales growth at mid-point, well ahead
of consensus (11% yoy). Growth should be supported by the structural shift
of lottery demand into online channels, new partnerships and a broader
acquisition mix beyond Google and Meta. The EBITDA guidance conservatively
reflects these growth investments and still points to a healthy margin of c.
27-30% (new eNuW: 28.8%). More importantly, the new mid-term ambition
suggests that mid-teens growth should extend into 2029e, supported by the
same structural tailwinds, the ramp-up of Traumhausverlosung and Games, as
well as further expansion initiatives that have yet to be disclosed.

ZEAL's earnings quality remains excellent. FY'25 FCF of EUR 59.5m exceeded net
profit of EUR 41.7m by a wide margin (143% conversion), reflecting non-cash
PPA amortisation (EUR 7.4m) and favourable working capital effects. At the
same time, net cash of c. EUR 31m at year-end leaves room for additional
capital returns, with further share buybacks as potential catalyst in 2026e
(eNuW).

In sum, very few European quality growth names combine mid-teens mid-term
sales growth, >30% EBITDA margins and further margin upside. Fewer still are
available at only 22x PPA-adjusted 2026e earnings, in our view.

That is why Zeal remains a high-conviction BUY, PT raised to EUR 80 (old: EUR
67), based on DCF.

You can download the research here:
https://eqs-cockpit.com/c/fncls.ssp?u=8f9343bebd97ed146f8ba60af42fd651
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.
++++++++++

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2298106 26.03.2026 CET/CEST

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