ZEAL Network (TIMA) AI Stock Analysis

• Market Cap: €1.04B
• Dividend Yield: 5%
• Average Volume (3M): 1.80K
• Price to Earnings (P/E): 22.1
• Beta (1Y): 0.46
• Revenue Growth: 62.00%
• EPS Growth: 58.84%
• Country: DE
• Employees: 214
• Sector: Financial
• Sector Strength: 75
• Industry: Gambling, Resorts & Casinos
• EPS (TTM): 0.47
• Shares Outstanding: 21,681,786
• 10 Day Avg. Volume: 1,833
• 30 Day Avg. Volume: 1,802
• PEG Ratio: -1.17
• Price to Book (P/B): 3.94
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 12.85
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €64.33
• Price Target Upside: 33.46% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

• Rating: 79 Outperform
• Price Target: €53.00 ▲(9.96%Upside)

ZEAL Network's strong financial performance, characterized by solid revenue growth and robust cash flow, is the most significant factor contributing to the score. The technical analysis also supports a positive outlook with bullish momentum indicators. Valuation provides a reasonable investment case, highlighted by an attractive dividend yield, although the P/E ratio suggests moderate growth expectations.

Positive Factors

Earnings

Q1 results were strong, with a 20% EBITDA beat mainly attributed to a higher lottery take rate and customer growth.

Guidance

ZEAL confirms its guidance for 2025 with sales of €195-205m and an EBITDA of €55-60m excluding exception costs.

Negative Factors

Price Target

The DCF-based price target has been increased from €58 to €60.

ZEAL Network Business Overview & Revenue Model

Company Description

ZEAL Network SE engages in the online lottery brokerage business in Germany. It operates in Germany and Other segments. The company's products include LOTTO 6aus49, Spiel 77, Super 6, EuroJackpot, GlücksSpirale, Keno, lotto clubs, instant lotteries, freiheit+, and Deutsche Fernsehlotterie. It is also involved in Lotto24, an online lottery brokerage business; and Tipp24, an online lottery operation for the charitable organizations, as well as investing in early-stage start-ups. The company was formerly known as Tipp24 SE and changed its name to ZEAL Network SE in November 2014. ZEAL Network SE was founded in 1999 and is based in Hamburg, Germany.

How the Company Makes Money

ZEAL Network SE generates revenue primarily through commissions and service fees associated with the sale of lottery tickets. The company acts as an intermediary between consumers and state-licensed lotteries, earning a commission on each ticket sold via its platforms. Additionally, ZEAL may offer subscription services, where players can participate in lotteries on a recurring basis, providing a steady revenue stream. The company also diversifies its income through partnerships with lottery operators and by offering value-added services, such as lottery syndicates and secondary lotteries, which enhance customer engagement and increase transaction volumes. Furthermore, ZEAL invests in marketing and customer acquisition strategies to grow its user base and expand its market share within the competitive online lottery sector.

ZEAL Network Financial Statement Overview

Summary

ZEAL Network exhibits strong financial performance with robust revenue growth and profitability improvements. The balance sheet is solid with strategic leverage, and cash flow management is commendable. Minor concerns include fluctuations in financing activities and a decrease in stockholders' equity.

Income Statement

ZEAL Network has demonstrated a robust revenue growth trajectory, with a significant increase in total revenue from 2023 to 2024. The gross profit margin is impressive, indicating effective cost management. The net profit margin and EBITDA margin have also shown improvement, reflecting enhanced profitability over the years. However, a slight concern could be the higher EBIT margin relative to the industry average, suggesting potential cost pressures.

Balance Sheet

The company's balance sheet is strong, with a healthy equity ratio and a manageable debt-to-equity ratio. The return on equity (ROE) has improved, illustrating efficient use of equity to generate profits. However, a decrease in stockholders' equity over the period could be a point of caution, indicating potential liabilities or dividend distributions.

Cash Flow

Cash flow from operations has shown a marked increase, underpinning the company's ability to generate cash from its core operations. The free cash flow growth rate is positive, indicating good cash management. The operating cash flow to net income ratio is strong, suggesting that earnings are well-supported by cash. However, fluctuations in financing cash flow could imply variability in financial strategies.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	203.23M	188.20M	116.05M	105.20M	83.59M	87.02M
Gross Profit	165.51M	169.69M	81.48M	94.55M	74.01M	76.18M
EBITDA	70.23M	61.87M	33.34M	32.48M	27.35M	20.60M
Net Income	46.77M	58.39M	12.85M	15.96M	10.79M	8.16M
Balance Sheet
Total Assets	450.64M	457.53M	394.65M	459.74M	503.40M	494.33M
Cash, Cash Equivalents and Short-Term Investments	148.11M	114.92M	58.05M	66.64M	93.33M	85.90M
Total Debt	98.10M	99.11M	27.70M	32.73M	15.63M	8.15M
Total Liabilities	202.81M	219.03M	129.90M	125.70M	118.46M	98.77M
Stockholders Equity	247.83M	238.51M	259.21M	327.95M	378.22M	387.67M
Cash Flow
Free Cash Flow	76.68M	74.78M	25.14M	27.06M	25.75M	4.73M
Operating Cash Flow	77.31M	75.33M	25.57M	28.49M	26.16M	5.37M
Investing Cash Flow	1.07M	160.00K	56.11M	-6.19M	-411.00K	-51.88M
Financing Cash Flow	-35.03M	-18.08M	-85.44M	-51.16M	-21.82M	-21.54M

ZEAL Network Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 48.20
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:TIMA, the sentiment is Positive. The current price of 48.2 is above the 20-day moving average (MA) of 47.06, above the 50-day MA of 46.29, and above the 200-day MA of 42.44, indicating a bullish trend. The MACD of 0.54 indicates Negative momentum. The RSI at 57.79 is Neutral, neither overbought nor oversold. The STOCH value of 85.71 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DE:TIMA.

ZEAL Network Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TIMA	79 Outperform	€1.04B	22.06	17.76%	5.00%	62.00%	58.84%
Sector *	68 Neutral	$16.73B	11.75	9.79%	3.76%	11.87%	-7.97%
0RIP	―	€19.02M	―	-17.65%	―	―	―
EUX	―	€232.78M	39.70	7.07%	7.21%	―	―
BWB	―	€239.69M	10.25	13.31%	2.63%	―	―
SB1	―	€198.86M	―	-13.03%	―	―	―
XTP	56 Neutral	€236.09M	―		―	―	―