ZEAL Network SE's Games Business: A Potential Growth Pillar, says NuWays AG

NuWays AG has updated its analysis on ZEAL Network SE, maintaining a "Buy" recommendation with a target price of EUR 51.00. This assessment highlights the potential of ZEAL's recently expanded Games portfolio as a significant secondary engine for growth and profitability. NuWays AG's report emphasizes the Games business's compelling user metrics, with average revenues per user (ARPU) considerably outpacing that of ZEAL's Lottery segment.

The report anticipates forthcoming changes in key performance indicators (KPIs) for the Games division, driven by the introduction of higher margin games. This strategy aims to optimize ARPU, central to ZEAL's growth tactics. NuWays AG projects the Games business could represent 12% of ZEAL's group EBITDA in 2024, scaling up to 17% by 2026, based on conservative user growth estimates and slight improvements in EBITDA margin.

A sensitivity analysis conducted by NuWays AG underscores the significant potential of the Games business once it achieves scale, suggesting it could substantially contribute to ZEAL's EBITDA. The firm reaffirms ZEAL's inclusion in the NuWays' AlphaList, citing the Games business's capacity to become a pivotal growth and profitability pillar for ZEAL.