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

Jackpots lining up while valuation remains attractive

A more supportive jackpot environment should drive a visible acceleration in ZEAL's Q2 billings. Following a soft Q1 jackpot backdrop, Q2 has already seen eight peak jackpots across Eurojackpot and Lotto 6aus49. While Lotto typically generates less “jackpot fever” than Eurojackpot, the impact on market activity is still material: last Wednesday’s Lotto draw generated c. € 35m in accumulated stakes, c. 43% above the average Wednesday Lotto draw.

Based on jackpot and stakes data to date, the German lottery market (Lotto and Eurojackpot combined) is tracking towards c. 8% yoy stakes growth in Q2, even without assuming any further peak jackpots before quarter-end. ZEAL should benefit disproportionately from this, driven by ongoing online penetration, market share gains and its stronger customer activation in high-jackpot phases. On this basis, we currently estimate Q2 billings of c. € 316m, implying 20.3% yoy growth and a clear sequential re-acceleration after the muted Q1 (+5.8% yoy, still reflecting a 10pp market outperformance; incl. proprietary formats).

Peak jackpots remain a key swing factor for player stakes and therefore an important short-term indicator for ZEAL's financials. Encouragingly, the base effect should remain supportive into H2 2026. H2 2025 saw only two peak jackpots across Lotto and Eurojackpot, clearly below the historical average of 4.5 per half-year. Even a normalisation towards average jackpot frequency would therefore imply a more favourable market setup, supporting the case for continued billings momentum beyond Q2.

At the same time, ZEAL's DreamCarRaffle should add further evidence that ZEAL can build economically attractive proprietary lottery formats beyond the traditional brokerage model. Season Zero has already reached c. 61% ticket sell-through ahead of the June 24 closing date, implying collected ticket proceeds of c. € 1.5m. Assuming similar proportions as for ZEAL's DreamHouseRaffle, c. 37% of the total is earmarked for charities and taxes, c. 20% for the prize and c. 43% for ZEAL via cost recovery and service fees. This implies that c. € 0.95m of collected ticket proceeds is available to cover the prize cost of c. € 350k and ZEAL's costs, including personnel and marketing. On this basis, reaching break-even for the initial season appears realistic, even after allowing for c. € 0.6m of operating costs. While the absolute contribution is still small, higher sell-through should directly benefit profits, while repeat players and lower customer acquisition intensity should support future margins. Notably, future seasons are set to include several cars across different themes, and hence DreamCarRaffle should broaden its appeal beyond pure sports-car enthusiasts and give ZEAL a repeatable format to monetise its existing reach and customer base.

In sum, Q2 should mark a clear billings re-acceleration. The structural online shift, ZEAL's diversification into proprietary formats within its core lottery expertise and an undemanding valuation further support the case (2026e EV/EBITDA c. 40% below 5-year average).

BUY, PT € 80, based on DCF.

You can download the research here: zeal-network-se-2026-06-08-update-en-5d592
For additional information visit our website: https://www.nuways-ag.com/research

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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Offenlegung möglicher Interessenkonflikte nach § 85 WpHG beim oben analysierten Unternehmen befindet sich in der vollständigen Analyse.
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