Shares of Palo Alto Networks (NYSE:PANW) gained 19.7% in May, according to data from S&P Global Market Intelligence. The network security specialist closed out the month with a fantastic third-quarter earnings report.
Palo Alto reported Q3 earnings of $1.17 per share on $869 million in sales, far ahead of Wall Street's estimates of $0.93 per share and $829 million, respectively. Top-line sales increased by 20% year over year.
The COVID-19 pandemic gave Palo Alto a boost as workers stayed at home to get their jobs done remotely. Strong network security is a must under these circumstances, and CEO Nikesh Arora believes that the health crisis kick-started a secular trend.
"I think some of these trends are going to be here to stay," Arora said in the earnings call. "I suspect that most companies want to maintain the remote secure access capabilities coming out of the pandemic."
This idea makes sense because many companies have now gotten their first taste of widespread work-from-home operations. Workers have beefed up their home offices while businesses set up secure network connections and picked their favorite platforms for digital meetings and workflow management. Throwing all of that hastily installed progress away would be a step backward in many cases. Palo Alto Networks is one of several long-term beneficiaries of these remote-work policy changes.