Equity research Zinzino, Q3 2025: A gut feeling for growth

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Zinzino reported 47% year-over-year revenue growth in Q3 2025, driven by strong organic momentum and acquisitions in key markets. Additional M&A and the successful launch of its gut health test power the outlook. The company delivered a positive margin surprise, with gross margin rising to 35.4% and EBITDA margin reaching 14.0%, showcasing scalability. We raise sales and earnings forecasts and increase the base-case valuation.

Continued growth momentum boosted by new launch and M&A

In line with the sales pre-announcement on 3 October, Zinzino reported revenue growth of 47 per cent in Q3 2025. The persistently high rate is driven by strong organic growth and M&A in key regions, primarily Central Europe, Asia Pacific, and North America. M&A activity is brisk, with, for example, the acquisitions of Bodē Pro, Truvy, and Sanki in recent months, adding new brands, some with USD 31m in sales, and expanding the distributor network in North America and Asia.

Also, the recently launched gut health test is already showing significant success, with 60,000 tests sold in under a month. While some launch buzz may boost initial sales, it appears to be a meaningful contributor to growth in the coming quarters. Looking ahead to next year, we believe that recurring revenues will also contribute to solid growth, as the subscription has expanded rapidly in 2024-2025.

Positive margin surprise validates scalability

Despite the strong growth, the gross margin expanded by 1.8 percentage points in the quarter to 35.4%, bucking the trend seen so far in 2025. Our forecast was 31.2%. One reason was the lower USD and raw material costs. It is encouraging that earlier margin headwinds appear to be fading, which in turn bodes well for operating leverage going forward. OPEX was largely in line with our expectations; however, it also included a one-off charge of SEK 12.8 million, which reflects underlying good cost control. Consequently, we are becoming more optimistic regarding margins. The CEO hints that the financial targets will be reviewed in 2026. The 14 per cent EBITDA margin in Q3 2025 also supports a raised outlook.

Strong outlook supports the rerating of shares

We increase our sales estimates by approximately 4 per cent on average for 2025E-2027E, driven by M&A and solid growth momentum. We also boost the margin forecast and raise earnings expectations by 12-13%. We raise the base case valuation to SEK 221 (200) per share. This corresponds to an EV/EBIT 2026E of 16x. Solid growth prospects, supported by a high share of subscription-based revenue, justify a premium valuation versus peers.

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