Wall Street Is Missing Out on This Surprising SaaS Story

While the name Nasdaq (NASDAQ: NDAQ) is immediately recognizable by most in the investing world, the company famous for its Nasdaq Composite Index has a much broader array of operations. It manages four segments -- market technology, investment intelligence, corporate platforms, and market services -- and does much more than manage its index and help companies go public on the stock market.

Expanding into anti-financial crime technology as well as analytics and cloud-based market data, Nasdaq has built intriguing business lines adjacent to its core offerings. Even better for investors, these adjacent lines generate robust software-as-a-service (SaaS) sales, leading to highly sticky and predictable cash generation for the company.

Looking ahead, Nasdaq continues to shift its focus toward these new lines, aiming for SaaS to account for 40% to 50% of annualized recurring revenue (ARR) by 2025. With recent financial performance showing the benefits of this SaaS transformation, the best may be yet to come for Nasdaq's investors.

Source Fool.com