Despite Regulatory Pressures, ZEAL Network SE Maintains Steady Growth

ZEAL Network SE continues to demonstrate a robust growth trajectory despite a past compression in valuation multiples. The German market's regulatory environment appears to be increasingly favorable for the company, as recent developments suggest enhanced enforcement against illegal online gambling. This shift promises to drive more customers to regulated platforms, benefiting ZEAL as a leading online lottery broker with a significant market share in Germany.

The company's expansion into online channels is expected to continue, with current online penetration in Germany at 31% and projected to exceed 50% in the mid-term. Furthermore, ZEAL's substantial investment in marketing could yield higher margins as the market matures and spending decreases. Additionally, ZEAL's Dream House Raffle has potential as a growth driver, with a future target of €50 million by 2030, offering higher margins than traditional lottery brokerage.

Analysts recommend a 'BUY' stance, with a target price of €67, indicating confidence in ZEAL's strategic execution and sustained financial health.