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 83
Target price on sight of:	12 months
Last rating change:
Analyst:	Simon Keller

Q3 preview: cheap for the growth on offer

Ahead of Q3 results on 4 November, we raise FY26 EBITDA to € 74.9m, the upper end of the € 70-75m guidance. Eurojackpot's return to its cap in Q4 creates a better backdrop for customer activation and marketing efficiency, strengthening the year-end earnings outlook (eNuW).

A richer product mix supports Q3 revenue growth. We expect more profitable team play and a rising contribution from proprietary raffles and freiheit+ to lift gross margins. Our € 311m lottery billings estimate (+1% yoy) sits against a subdued market, with combined German Lotto and Eurojackpot stakes down 3% yoy. While Q3 recorded 16 Lotto peak draws (vs. none in Q3 25), Eurojackpot recorded no peak draws (vs. two in Q3 25). For ZEAL, Eurojackpot peaks are more valuable than Lotto peaks, as they fit its marketing playbook particularly well and trigger much greater incremental player spending, making their Q4 return especially relevant for year-end growth (eNuW).

One-offs to mask c. 19% underlying EBITDA growth in our forecast. We expect Q3 group sales to rise 19% yoy to € 72.7m, including € 7.5m from SevenCanyon, implying c. 7% yoy organic growth. Our € 18.4m EBITDA forecast (-2% yoy) incorporates c. € 4m of acquisition-related one-off costs. Excluding these one-offs, EBITDA would reach € 22.4m, up c. 19% yoy, with a broadly stable margin of 30.8% (eNuW). Full-year UK consolidation and the removal of these one-off costs remain FY27 earnings drivers.

Q4 offers the more favourable jackpot mix. Three Eurojackpot draws at the € 120m cap compare with none in Q4 2025. We forecast Q4 EBITDA of € 17.7m (+20% yoy), conservatively allowing for marketing spending of € 28.2m (+52% yoy; eNuW). Lower-than-assumed marketing spending would leave scope for FY26 EBITDA to exceed the top end of guidance, in our view.

Higher spin limits reinforce the Games growth case. We forecast Q3 sales of € 4.3m (+18.7% yoy). User growth remains central, with higher permitted stakes supporting spending among eligible players. At an H1 EBITDA margin of c. 41%, Games offers scope to lift group margins as it grows into a larger share of sales (eNuW). Alongside proprietary lottery products, this broadens the growth and margin expansion opportunity beyond the jackpot cycle (eNuW).

The valuation leaves substantial room for a re-rating. ZEAL trades at c. 11x FY26e EV/EBITDA, while its five-year historical average is 81% higher (eNuW). We see lottery digitalisation, international expansion and new proprietary products driving an 18% sales CAGR 2025-28e. The discount looks excessive for a business with these structural growth drivers and an increasingly diversified revenue base.

Reiterate BUY, with an unchanged PT of € 83, based on DCF.

You can download the research here: zeal-network-se-2026-10-21-previewreview-en-7c857
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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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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