After a bruising year for the markets in 2022, many investors are probably wondering which stocks are worth buying at these lows. There are plenty of fallen stars from the previous bull market that are still in great position to keep growing over the long term.

Your best bet is to look for fallen stocks whose underlying businesses still maintain key competitive advantages. This stacks the odds in your favor when looking for a deeply undervalued stock that could deliver market-crushing returns once the market turns around.

That said, here are two fallen growth stocks I would buy today.

1. Etsy

Shares of Etsy (ETSY 3.87%) have fallen 60% from their all-time high. The company was a big winner a few years ago when many people were turning online to shop while stores were closed. The company's revenue, which is earned by charging transaction fees, more than doubled in 2020, and investors sent the stock soaring into the stratosphere.

The same advantages that sent Etsy soaring during the pandemic are still there. It operates a unique marketplace built around boutique merchandise that you can't find in regular retail stores. But Wall Street is overlooking these advantages due to weak growth last year.

Gross merchandise sales were virtually flat through the first three quarters of 2022. Revenue was up 9% following a transaction-fee increase in April, but Etsy should be able to grow its gross merchandise sales at a much higher rate once the pandemic hangover is behind it.

Management is focused on increasing sales from its existing base of buyers. The number of habitual buyers -- defined as those who spent $200 or made at least six purchases on separate days over the previous year -- increased 223% in the third quarter. 

Buyers are also spending more. Last quarter, gross merchandise sales per active buyer were up 33% year over year on a trailing-12-month basis. Based on these numbers, Etsy should see growth accelerate once consumer spending picks up again. 

The prospects of improving growth make the current valuation of 25 times trailing free cash flow quite attractive. 

2. Wayfair

Wayfair (W -5.03%) has emerged as a top online brand in the $800-billion home-goods market. With a vast selection and competitive prices, it's revenue grew more than fivefold since 2015, and management believes it can scale the business to $100 billion in annual revenue, or nearly 10 times its current size. 

But Wayfair is not short of challenges in the near term. In the third quarter, revenue fell 9% year over year, and most worrisome was the fact that active customers, who totaled 22.6 million, dropped 22%. Weaker results sent the stock down 91% from its all-time high.

It's understandable for the stock to fall given those weak numbers, but at a market cap of just $3.5 billion, investors are selling Wayfair's future way too short. For example, the company generated a peak of $1.5 billion in free cash flow when demand was strong in 2020. This suggests the company can mint some serious cash that could catapult the stock higher down the road.

Another reason to bet on the stock is that Wayfair seems to be misunderstood. It is as much a tech company as a home-goods brand. Half of the corporate staff works in technology. Most operations -- including inventory management, logistics, customer acquisition, and the shopping experience -- are informed by machine learning and artificial intelligence models. 

The company uses two decades' worth of customer data to build these models, which in turn informs suppliers about how much inventory they should hold and what price to set for merchandise to earn a profit. These tools explain why Wayfair has won over 23,000 suppliers providing over 30 million products on its platform.  

Wayfair's technology and selection should lead to growing revenue over time, as it did before the pandemic. In the near term, management's goal is to improve the company's profit margin, to serve as a catalyst for the stock in 2023.