With Etsy (ETSY 4.76%) posting paltry 5.2% year-over-year revenue growth in this year's first quarter, it might be a cause of concern for investors accustomed to the pandemic winner's massive gains over the past couple of years. Of course, greater than 100% sales growth can't be expected to continue into perpetuity. 

Along with many other tech stocks out there, Etsy's shares have been getting crushed, down 58% so far in 2022. Investors might be wondering whether this e-commerce darling's best days are behind it. It certainly might appear that way at first. 

But if we take a step back and remember the bigger picture, it'll become strikingly clear that Etsy remains a solid investment. 

Opening jeans from online shopping.

Image source: Getty Images.

Thank the economic reopening 

With everyone stuck at home, online shopping was a major beneficiary of the pandemic. As restrictions have eased, people have started venturing out again. And things are beginning to normalize a bit.  

Therefore, it's no surprise that e-commerce growth is slowing down. Consumers want to spend on travel and experiences as opposed to physical goods. So to see Etsy register a sales jump compared to the 2021 first quarter's 141.5% year-over-year revenue gain is impressive. 

"Despite continued uncertainty and macroeconomic headwinds, Etsy continues to rise to the occasion to deliver solid results that show us maintaining most of the gains reported during the extremely strong year-ago period," CEO Josh Silverman said when describing the quarter. The biggest disappointment was that net income fell 40.1% year over year due to a 71% higher employee headcount. But this will surely benefit the company in the future. 

Better days ahead 

Even with the sky-high pessimism surrounding pandemic-winning stocks, Etsy's long-term outlook remains unchanged in my opinion. The business possesses a superb financial profile, with a trailing 12-month gross margin of 71% and operating margin of 18.5%. And in addition to the main Etsy site, consumers can shop at the company's other marketplaces, including Reverb for musical instruments, Depop for secondhand apparel, and Elo7, otherwise known as the Etsy of Brazil. 

Because Etsy sells a broad range of unique and creative merchandise, the company's global opportunity is truly massive. According to management, the business is penetrating a market worth $466 billion (comprising Etsy's product categories in its seven key geographies). For comparison's sake, gross merchandise sales totaled $13.5 billion in 2021, so there's a ton of potential expansion ahead. 

Take advantage of the cheap stock 

With the stock's continuous fall, Etsy now trades at an attractive price-to-earnings ratio of 31, the lowest since early 2018. It's safe to say that investors have completely thrown Etsy out with other previously high-multiple, high-growth stocks. However, this company actually has an incredibly bright future. 

The next six to 12 months are full of fear and economic uncertainty, and there could be more pain for investors. But for those who adopt patience and a long-term mindset, looking out at least over the next five years, Etsy's stock appears to be a solid buying opportunity today.