| Valuation method | Value, € | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 57.97 | 19 |
| Intrinsic value (DCF) | 118.14 | 143 |
| Graham-Dodd Method | 0.67 | -99 |
| Graham Formula | 182.72 | 276 |
ZEAL Network SE (TIMA.DE) is a leading online lottery brokerage firm based in Hamburg, Germany, operating under brands like Lotto24 and Tipp24. Specializing in digital lottery services, the company offers popular games such as LOTTO 6aus49, EuroJackpot, and GlücksSpirale, catering to the German market and beyond. As a pioneer in the online lottery space, ZEAL Network SE leverages its strong digital platform to provide seamless lottery ticket purchasing, subscription services, and innovative gaming solutions. The company also invests in early-stage startups, expanding its footprint in the broader gaming and entertainment sector. With a solid market position in Germany, ZEAL Network SE benefits from the growing trend of digitalization in the gambling industry, supported by regulatory frameworks that favor licensed operators. Its diversified product portfolio and strategic partnerships with charitable organizations further enhance its competitive edge in the consumer cyclical sector.
ZEAL Network SE presents an attractive investment opportunity due to its dominant position in Germany's online lottery market, strong cash flow generation, and consistent profitability. The company's low beta (0.484) suggests relative stability compared to broader market volatility, making it a defensive play in the gambling sector. With a market cap of €966 million and a solid dividend yield (€1.1 per share), ZEAL appeals to income-focused investors. However, risks include regulatory changes in Germany's gambling laws and dependence on a single geographic market. The company’s net income of €58.4 million and operating cash flow of €75.3 million in the latest fiscal year underscore its financial health, but investors should monitor debt levels (€99.1 million) and competitive pressures from both domestic and international players.
ZEAL Network SE holds a strong competitive position in Germany’s online lottery brokerage market, primarily due to its first-mover advantage and established brand recognition under Lotto24 and Tipp24. The company benefits from exclusive partnerships with state lottery operators, ensuring a steady revenue stream from ticket sales and subscriptions. Its digital-first approach allows for scalability and cost efficiency, differentiating it from traditional brick-and-mortar lottery retailers. However, ZEAL faces competition from both domestic and international online gambling platforms, which may offer broader gaming options beyond lotteries. The company’s focus on regulatory compliance in Germany provides a moat against unlicensed operators, but expansion outside its core market remains limited. Additionally, its investments in early-stage startups could yield high returns but also introduce volatility. While ZEAL’s financials are robust, its reliance on the German market makes it vulnerable to local economic and regulatory shifts. Strengthening its technological infrastructure and exploring strategic acquisitions could further solidify its market leadership.