COUR - Zoom named top pick as RBC starts slate of software names

Alistair Berg/DigitalVision via Getty Images In a broad note about the software industry, RBC initiates or assumes coverage of 10 stocks and names Zoom (ZM), Twilio (TWLO), and Pegasystems (PEGA) as its top picks. The firm sees multiple secular drivers for the software industry, remaining bullish despite the recent pullback and outlining four key drivers on the path to profitability: strong gross margins, strong net expansion rates, sales efficiency, and a large total addressable market. Zoom is RBC's top pick overall as the "sharp pullback" has created an attractive entry point. The firm calls Zoom a "critical component" of the coming hybrid work norm and says the product is differentiated enough to hold off competition from Microsoft and Google. Twilio plays a "crucial role in allowing companies to communicate with the customer." In many ways, RBC sees Twilio becoming the next Amazon Web Services "having opportunities to move 'up the

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Zoom named top pick as RBC starts slate of software names