ZEAL Network SE Receives BUY Recommendation from NuWays AG with a Positive Outlook

NuWays AG recently released its research update on ZEAL Network SE, maintaining a BUY recommendation with a target price of €51.00. The firm projects significant growth for ZEAL, highlighted by their strong sales guidance for the fiscal year 2024, surpassing market expectations. ZEAL anticipates sales between €140-150 million and an EBITDA of €38-42 million, a direct result of strategic initiatives including the introduction of high-margin social lotteries and effective price discrimination tactics.

ZEAL's Q4 results verified the accuracy of their FY targets, with lottery billings reaching €210 million and sales at €30 million. The report also praised ZEAL for its expanding Games sector which now stands as a potent growth and profitability vector, constituting 6% of the Q4 sales. Furthermore, ZEAL plans a squeeze-out of Lotto24 shareholders, aiming for financial and tax benefits, amidst a strong net cash position.

The analysis underscores ZEAL's potential for margin expansion and operational leverage. With the Games segment burgeoning, NuWays anticipates further uplift in ZEAL's financial performance. Despite the ongoing financial strategies, including additional debt for the Lotto24 squeeze-out, the company's solid cash reserves are deemed adequate to support its ambitions.