Some investors might think of $100 as an insignificant sum to invest. Worse, after reading headlines such as "Dow falls more than 1,000 points in a day" or information to that effect, one may not feel like putting significant sums to work in the market.

Nonetheless, the market has recovered from every past downturn and will probably bounce back from the current declines. Moreover, $100 might serve as a beginning amount for those who want to try out investments in individual companies.

Fortunately, retail stocks like Etsy (ETSY 4.76%) and GrowGeneration (GRWG -0.49%) provide such opportunities and could motivate buyers who think these stocks can return to or exceed past highs.

A consumer surrounded by plants buys online from a laptop.

Image source: Getty Images

1. Etsy

Etsy has stood out above much larger peers by taking a unique approach to e-commerce. On the surface, it serves as a site for artisans, craft suppliers, and vintage goods sellers. It has also attracted sellers by allowing them to post items on the site for as little as $0.20 and by building a unique search engine that helps buyers find these smaller entrepreneurs.

However, the factor that keeps its sellers bypassing much larger sellers such as Amazon may be Etsy's community. This links buyers to sellers in an ecosystem focused on inspiring relationships, knowledge sharing, and ideas rather than simply executing transactions.

Nonetheless, this community has experienced some strife, as some sellers went on strike in April to protest rising transaction fees. Also, like many growth stocks, Etsy has experienced a brutal sell-off. As recently as November, it sold for above $300 per share. Still, the recent downturn has taken the price into the $80-per-share range.

The recent financials likely helped drive that stock price action. In the first quarter of 2022, Etsy's revenue came in at $579 million, a 5% increase compared with the same quarter last year. In contrast, net income fell by 40% to $86 million over the same period as rising product development and general and administrative expenses cut into profits.

This represents a dramatic slowdown from 2021 when revenue of $2.3 billion grew 35% year over year. Still, the 2022 outlook points to improvement as Etsy forecasts between $2.9 billion and $3.2 billion in revenue, a 31% increase at the midpoint.

Additionally, its falling stock price takes its price-to-sales (P/S) ratio to around five, a stark contrast from the sales multiple of 19 last November. The P/E ratio of 26.95 confirms its discounted valuation, as it trades for about half of Amazon's 52 earnings multiple. Such valuations could make Etsy a top e-commerce buy as the company seeks to return to its past growth rates.

2. GrowGeneration

GrowGeneration seems to have generated the opposite of growth over the last year. After topping out at nearly $68 per share in early 2021, the share price has fallen by more than 90%. This occurred as an oversupply of cannabis in areas such as the West Coast – the region where it located about half of its stores – brought the company's massive growth to a halt.

However, it has become the No. 1 hydroponics retailer in North America and serves as a pick-and-shovel play to the marijuana industry. It owns 63 stores between California and Maine and operates a business in private-label products. GrowGeneration also plans to add 10 to 15 stores this year, mostly in the eastern half of the country. 

Moreover, Grand View Research predicts the cannabis industry will grow to $102 billion by 2030, a 26% compound annual growth rate. Since 80% of that global industry is in North America, GrowGeneration has positioned itself to play a role in that increase.

Still, such increases did not materialize in the first quarter of 2022, as quarterly net sales of $81.8 million fell 9% from year-ago levels. Since expenses rose amid the lower activity, the company reported a net loss of $5.2 million in Q1 after announcing $6.1 million in net income in the first quarter of 2021.

GrowGeneration also reduced 2022 revenue guidance to between $340 million and $400 million after previously forecasting $415 million to $445 million. This stands in contrast to 2021 results when revenue of $422 million increased 119%.

Nonetheless, the P/S ratio of 0.7 has fallen from about 15 in February 2021 and is well below Tractor Supply's sales multiple of 1.6. Assuming the cannabis market recovers as forecasted, this retail stock could move higher as it continues to supply the burgeoning marijuana industry.