Zeal Network SE (ISIN: DE000ZEAL241, WKN: ZEAL24)
Undisputed market leader in the German online lottery
What is an online lottery provider doing in a fund full of mechanical engineering companies and technology companies? More than you would initially expect. Zeal Network is a classic hidden champion of the digital economy: a capital-light, profitable business model with market leadershipstrong customer growth and cash flow – and yet hardly paid attention to by many investors.
The company, founded in Hamburg in 1999, is now the leading online broker of lottery products in Germany. Through the Lotto24 and Tipp24 platforms, Zeal enables digital participation in state-licensed lotteries such as Lotto 6aus49, Eurojackpot or GlĂĽcksSpirale – and receives commission for doing so without bearing the payout risk. The model is similar to that of a huge, national digital lottery kiosk: high fixed cost degression, lower risk, high scalability. With an online market share of almost 44 percent, Zeal has an exposed position in Germany.
A key growth driver is the dream house raffle launched in 2024 – Germany’s first social lottery, in which a ready-to-move-in property is raffled off. The innovation was well received: the first campaign alone sold around 14 million tickets, and four houses have already been raffled off since then. The concept combines lottery appeal with social impact – a clever move that broadens the customer base and opens up new target groups. There is also a growing games business with almost 600 titles and a strategic partnership with Tipico for sports betting fans.
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Numbers and rating: In the 2024 financial year, group sales grew by 62 percent to 188 million euros, and earnings before interest, taxes, depreciation and amortization (EBITDA) almost doubled to 61.9 million euros. In the first nine months of 2025 (the annual report for 2025 will be published on March 25, 2026), sales increased by 34 percent to 162.6 million euros, and EBIT rose by 65 percent to 47.67 million euros. EBITDA grew by 55 percent to 54.0 million euros. The annual forecast has been raised twice: Zeal now expects sales of 205 to 215 million euros and an EBITDA of 63 to 68 million euros for 2025. The share is trading at around 50 euros, the P/E ratio is just under 19. NuWays analysts see a price target of 67.00 euros, which corresponds to an upside potential of around 30 percent. The solid dividend yield of around 2.6 percent completes the picture – Zeal increased the distribution for 2024 to 2.40 euros per share, more than twice as much as in the previous year thanks to the special distribution of 1.10 euros per share.
Interest-independent and “customs-proof”: Zeal benefits from another special feature: the business model is almost interest-free and completely internal market-oriented. No export risks, no customs problems, no dependence on raw material prices. The group is financed almost exclusively from operating cash flow and, despite the complete acquisition of the Lotto24 subsidiary, is once again on the way to becoming debt-free. Of course, falling interest rates still help: They improve the valuation multiples and make the stock more attractive for return-oriented investors.
Why interesting? Zeal is the opposite of a cyclical small cap – and therefore a potentially interesting addition to a small cap portfolio. The business model works independently of the economy, customs duties and currency fluctuations. Anyone who relies on a profitable growth company with market leadership, increasing dividends and upside potential could find Zeal an interesting small cap story in the German capital market.
