Every week I’ll provide updates on the latest trends in cloud software companies. Follow along to stay up to date! Negative GDP Growth?! Q1 GDP numbers came out yesterday and the headline number was quite surprising. MoM GDP was -1.4% vs consensus estimates of +1.1%. Seeing shrinking GDP can be jarring. Two quarters in a row of shrinking GDP = recession. However, like most macroeconomic signals these days it’s important to dig in beyond the headline figure. Peeling back the onion of the Q1 GDP figure, we still (in my opinion) see an economy that is weaker than most predicted, but it’s not as bad as negative GDP growth would suggest.. First, Q1 GDP is a MoM comparison. And GDP grew 7% in Q4. This made the MoM comp for Q1 incredibly high. Looking at Q1 GDP YoY we actually saw a +3.6% YoY growth. Second, when we look at the individual components of GDP growth (Consumption, private investment, government spending, net exports), the areas dragging down GDP the most was net trade. Consumption was +2.7% vs expectations of 3.5%. Private investment was +2.3% vs expectations of +4%. So both were weaker than expected, but both still positive and not as bad as shrinking GDP may suggest.
Hi! You made an error here (multiples too high, screenshot is right):
"Bucketed by Growth. In the buckets below I consider high growth >30% projected NTM growth, mid growth 15%-30% and low growth <15%
High Growth Median: 21.0x
Mid Growth Median: 13.8x
Low Growth Median: 7.1x"