ZEAL Network SE Shows Promising Growth Amid Market Trends

ZEAL Network SE, classified by NuWays AG, demonstrated significant market share gains during peak jackpot phases in the first quarter. The brokerage business witnessed a substantial increase in market share, preliminarily estimated at 43-44%, up from 41.4% in the prior fiscal year. Final figures are expected in January 2025.

Growth in ZEAL's lottery brokerage stems from increasing online penetration, currently at 24%, and a boost in market share. The company's strategic shift toward brand marketing has improved customer acquisition costs and enhanced user intake. Additionally, new offerings like Games and Dream House Raffle position ZEAL for growth beyond state lotteries, presenting higher margins and ARPUs.

The company’s operating leverage will be fully realized into FY'25, despite a temporary increase in personnel expenses this year. These factors underpin the reiterated 'Buy' recommendation with a target price of €54.00.