ZEAL Network SE: Optimistic Financial Outlook and Growth Expectations

ZEAL Network SE, according to recent analysis by NuWays AG, holds a promising financial future, leading to a "BUY" recommendation. Despite a challenging Q4 in 2023, where total German lottery spending saw a decline, ZEAL managed to maintain solid growth throughout the year. The preliminary figures for FY'23 reveal a slight year-on-year decline in Q4 billings but showcase a significant overall annual growth of 11% to €841m, exceeding the company's guidance. This growth is attributed to an increase in monthly active users and average billings per user.

The introduction of a new 'Games' division adds to the optimistic outlook, despite its slow start due to regulatory delays. Initial performance indicators are positive, and further growth is expected in Q4. ZEAL's financial guidance appears achievable, with a promising outlook for FY'24. The company anticipates a 12% growth in lottery sales and a meaningful contribution from the 'Games' business. This diversified approach, coupled with strategic marketing investments, positions ZEAL for sustained growth.

The report underscores an opportunity for investors, pointing to the recent share price dip as a potential entry point amidst early signs of a strong growth trajectory in 2024. NuWays AG reiterates its "BUY" rating with a target price of €51.00, signaling confidence in ZEAL's financial strategy and market positioning.