If you're an investor with the risk tolerance to take positions in growth stocks, there are certainly an abundance of them trading discounted right now. However, it's important to focus on investments in companies with quality underlying businesses. A stock might be on sale for a good reason, but price alone doesn't tell you whether it's a wise long-term addition to your portfolio.  

Today, we're going to look at two great businesses trading down that long-term investors should consider scooping up on the dip. If you have $1,000 to invest in stocks, you may want to put at least part of that toward these powerhouse growth stocks before the year is out. 

1. Etsy's niche makes it a durable e-commerce play

It's hardly a secret that changes in consumer spending and headwinds posed by the current macro environment could easily impact a business like Etsy's (ETSY 0.23%). When consumers are tightening their wallets and reeling from the consequences of still-high inflation, discretionary purchases tend to be the first thing to go. 

Even as shifting consumer spending habits and the strength of the U.S. dollar compared to certain foreign currencies were evident in Etsy's most recent financial report, it still generated 9% year-over-year revenue growth in the first nine months of 2022. This was driven by a 9% jump in marketplace revenue and 10% surge in services revenue from the year-ago period.

Etsy also recorded $1.1 billion in cash, cash equivalents, and investments on its balance sheet at the end of the nine-month period. An increase in stock-based compensation and a non-cash write-down of $1 billion related to its prior Depop and El07 acquisitions were key drivers behind the $804 million net loss it recorded in the first nine months of this year.  

Etsy's advantage lies in the particular slice of the global e-commerce market that it occupies. The company has few direct competitors, and the ones that it does have simply don't operate at the size and scale of its platform. Management estimates that the specialty goods market alone, just one piece of its overall business, represents an approximately $100 billion total addressable market. 

While recent quarters have seen a slowdown in growth as the robust pandemic surge has receded and ongoing economic factors remain in play, Etsy is facing these dynamics against the backdrop of a strong track record that it established well before the pandemic era. Over the trailing-five-year period, Etsy's annual revenue has increased by a notable 428%, while its annual net income has increased by 503%. Meanwhile, the company's cash from operations has risen to the tune of 843% over that same window of time.  

If you're taking a long-term position in Etsy, the strength of its core business and the durable factors driving the growth of the broader e-commerce market offer a notable opportunity, even if short-term headwinds present challenges.

There's also the fact that Etsy is known for its slate of vintage, unique, specialty, and handmade products. These are items that consumers may be more inclined to buy as they turn away from the hiked prices of big-box store retailers and seek out more craft-based goods from small sellers in a recessionary environment. 

At its current share price, a $1,000 investment in Etsy would add about eight shares to your portfolio. 

2. Shopify still has massive long-term growth potential

Shopify (SHOP 2.05%) was undoubtedly one of the most popular growth stocks in the earlier days of the pandemic. It makes sense. With so many people stuck at home for months on end, more people were shopping online than ever before and a surge of entrepreneurs launched online businesses to supplement or replace their income in the new world of work. 

The underlying strength of Shopify's business was evident in the most recent quarter, even as growth has decelerated from pandemic highs. Merchant solutions revenue, which surged 26% from the year-ago period, comprised the highest percentage of gross merchandise volume since Shopify was launched (2%). Total revenue jumped 22% from the year-ago period, while gross merchandise volume increased 11%. The company also had nearly $5 billion in liquidity on its balance sheet at the end of the period.

While the money it's spending to build out its infrastructure for merchants weighs on the bottom line right now, these investments (such as its acquisition of fulfillment technology provider Deliverr) can pay off in spades in the years ahead. Shopify is already showing signs of moving back to profitability. Notably, the company shaved its net loss from $1.2 billion in the second quarter of 2022 down to $158 million in the third quarter.   

While brick-and-mortar retail is increasingly proving that it's anything but dead, and consumers are spending less on discretionary items than they were a few years ago, e-commerce is still a massive market growing at an incredible clip. In fact, the global e-commerce market is on track to hit a valuation of $27 trillion in the year 2027.  

Shopify continues to form an integral core of this compelling space. Its platform enables business owners around the globe -- whether they have a brick-and-mortar store, online store, or a combination of both -- to streamline every aspect of their operations to meet the demands of the digital age.

From sourcing inventory to managing order fulfillment to tailored email marketing campaigns, whether it's a celebrity name brand or a first-time business owner, the Shopify platform has something for everyone.

According to market intelligence platform PipeCandy, Shopify's platform supports 15% of all business-to-consumer e-commerce websites and processes 21% of all e-commerce sales globally.  For investors with a long-term horizon, Shopify's continued potential may be too good to overlook. 

At its current share price, a $1,000 investment in Shopify would add about 25 shares to your portfolio.