Growth or Margins - what's more important?

Both.

Growing margins and revenue are a key driver of cash flow growth.

Cash flow growth is the key driver of valuation - whether using DCF or PE multiples.

Fast growth companies trade at higher multiples than slower growth companies but fast growth companies face more risks (typically).

That is the second key factor in valuation - risk - the volatility in the cash flow amount and growth rate.

So don't forget to manage risk. Negative surprises kill valuations fast.

The state of the economy has an impact as it sets the macro environment the company operates in.

But more important is the state of the specific industry & geography of their target clients and things that impact demand and the ability to increase sales volumes, raise prices or reduce cost of good sold for its products.

Some markets actually grow when the rest of the economy struggles.