Palantir vs. Hims: Two Growth Engines, Two Worlds of Tech

Two Innovation Stories, One Market Test

Palantir Technologies and Hims & Hers Health may seem like companies from entirely different universes—one, a pillar of government and industrial data intelligence, the other, a digital health disruptor rewriting the rules of American healthcare. Both have captured market attention for their rapid growth and bold visions, but each embodies a distinct approach to technology, capital allocation, and competitive strategy. What are the forces shaping each company’s story, who is executing better on their business model, and what do the numbers really reveal about their futures?

Revenue Growth: Different Speeds, Different Playing Fields

Palantir, though founded over two decades ago, has only recently accelerated its revenue growth as contracts with government agencies, defense, and major corporations reached critical mass. In the past few years, Palantir’s annual growth rates have stabilized in the 20%–30% range, with a notable rebound in 2024 and renewed momentum in early 2025 as AI adoption intensifies. Hims, a far younger company born in the telehealth boom, has posted even more spectacular growth—annual revenue surges of 60%–80%, driven by swelling user numbers and expansion into new categories like mental health, wellness, and sexual health. In 2024, Hims maintained high double-digit growth, while Palantir transitioned from hype-driven expansion to more steady, institutional scaling.

Dilution: Funding Growth and Protecting Shareholder Value

Palantir’s path to public markets was marked by significant dilution, especially in the years following its direct listing. The company used stock-based compensation and share offerings to attract top tech talent and fuel aggressive expansion. While dilution rates have moderated, 2024 still saw a roughly 5%–7% increase in outstanding shares. Hims, by contrast, experienced a sharp spike in dilution around its 2022 capital raises, but has since reined in share issuance, reflecting a shift to positive EBITDA and more internally funded growth. For investors, this means Palantir’s older shareholders have absorbed more dilution risk, while Hims has pivoted more quickly to sustainable operations.

Free Cash Flow: Engines of Expansion and Model Gaps

Palantir’s free cash flow picture was weak until 2022 but has since improved dramatically. The shift to positive, growing FCF is due to higher-margin contracts, broader commercial wins, and a more disciplined approach to cost management. Hims, meanwhile, saw a massive FCF spike in 2022–2023 as its digital-first platform scaled rapidly and operational efficiencies kicked in. However, as Hims began investing more heavily in technology, marketing, and product development, its FCF growth moderated in 2024—still healthy, but reflecting a maturing growth curve.

Stock Performance: High Returns, High Volatility

Over the past five years, Palantir’s stock has returned an eye-popping 448%, fueled by investor excitement around AI, data analytics, and government contracts. The company has become a bellwether for institutional bets on national security, public sector digitalization, and next-generation intelligence. Hims isn’t far behind, posting a 310% gain in the same period as it led the telehealth revolution, expanded service lines, and capitalized on America’s healthcare transformation. Still, Hims’ stock has proven more volatile, tracking closely with investor sentiment on growth sustainability and margin progression.

Valuation: Premiums and the Price of Future Growth

Palantir trades at a sky-high 168x multiple on free cash flow, a level that reflects the market’s conviction in its technology moat, scale, and upside potential in the AI arms race. Hims trades at a much lower 44x multiple—still expensive by classic standards, but a sign that investors remain cautious, pricing in regulatory risks, competitive threats, and a more crowded digital health field. The contrast is clear: investors are willing to pay a significant premium for Palantir’s perceived defensibility and institutional cachet, while expecting Hims to prove its model with consistent profitability.

Balance Sheet Strength: Debt, Equity, and Flexibility

Palantir entered its public life with a relatively high debt-to-equity ratio, the legacy of years of heavy investment and rapid expansion. However, recent quarters have shown steady improvement, with debt declining as cash flow grows. Hims, on the other hand, has maintained an extremely low debt profile from the outset, relying on focused capital raises and a lean cost structure. This gives Hims a unique flexibility—especially valuable in periods of tightening credit or economic uncertainty—while Palantir’s financial leverage remains more sensitive to global market conditions.

Margins: Operational Power and Business Model Differences

Palantir boasts exceptionally high gross margins—often above 80%—thanks to its software-driven business and dominance in secure, high-value data analytics. Its free cash flow margins are also robust, reflecting operational discipline and the benefits of recurring, high-ticket contracts. Hims achieves strong gross margins in the 60%–70% range but sees more modest FCF margins due to ongoing investment in customer acquisition, product development, and market expansion. These differences highlight how Palantir’s business leans toward high-value, low-volume contracts, while Hims scales through higher volume and continuous service innovation.

Return on Capital: Turning the Corner

Historically, Palantir struggled to deliver positive returns on invested capital due to persistent operating losses. Starting in 2023, this trend reversed as the company turned profitable and improved its capital efficiency. Hims has also moved steadily toward positive returns, signaling a shift from “growth at all costs” to more sustainable, value-creating operations. While Palantir’s improvements are more dramatic, Hims’ stability and predictability may appeal to investors wary of big swings in tech valuations.

Forward-Looking Perspectives: Risks and Opportunities

Looking ahead, Palantir is focused on securing more large-scale government contracts, expanding commercial AI offerings, and maintaining its leadership in security and intelligence. The main risks are keeping growth rates high, reducing future dilution, and maintaining a valuation premium amid rising competition and evolving regulations. Hims, meanwhile, is betting on healthcare’s digital transformation, with opportunities in telemedicine, mental health, and international expansion. However, the company faces tough competition, the need to keep innovating, and the challenge of balancing marketing spend with profitability in a rapidly changing industry.

Conclusion: Two Growth Stories, Two Investment Cases

Palantir and Hims are proof that technology-driven companies can deliver powerful growth, but with vastly different strategies, risk profiles, and market opportunities. Palantir rides the wave of AI, data security, and institutional contracts, commanding premium multiples and broad investor faith in its future. Hims, as a consumer-focused disruptor, is building a new kind of brand in digital health, showing it can achieve profitability while still growing rapidly. For investors, these two companies offer contrasting but compelling visions of what the next decade of tech and healthcare could look like—each with its own blend of risk, reward, and long-term promise.