Even though many software stocks are still well below their 2021 highs, the software sector is an attractive one -- assuming you pick the right stocks.

Software companies generally have recurring-revenue subscription models, low capital requirements, and high gross margins, making their results somewhat predictable and their stocks attractive.

However, many software-as-a-service companies overspent during the pandemic, while overpaying their employees via stock-based competition, putting their ultimate ability to generate profits in question.

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Source Fool.com