It's been a great six months for investors to start 2023. The S&P 500 and Nasdaq Composite climbed 16% and 32%, respectively, in the first half of the year. This renewed optimism, especially after a terrible showing in 2022, is enough to bring most investors off the sidelines. 

In fact, it's a good idea to take a closer look at Airbnb (ABNB 0.29%) and Etsy (ETSY -0.16%), which are both well off their peak prices. Here's why they are two solid growth stocks to buy on the dip. 

Airbnb 

Alternative accommodations site Airbnb struggled during the early stages of the pandemic, which isn't surprising. Shelter-in-place orders restricted consumers' ability and desire to travel, hurting the company's business.

But the travel industry has made a major turn for the better, and last year, 394 million nights and experiences were booked on Airbnb's platform, up 31% year over year. The gross booking value of this activity totaled $63 billion, up 35% from 2021. This momentum carried over into the first quarter of 2023 as Airbnb blew past Wall Street estimates for revenue and earnings per share, although the management team did give a cautious outlook for the second quarter, mainly due to difficult year-ago comparisons. 

Unlike Marriott or Hilton, Airbnb doesn't own real estate. It instead connects travelers with property owners (hosts) across the world, collecting fees for each booking its platform facilitates. And this has resulted in tremendous profitability. After generating $3.4 billion of free cash flow (FCF) in 2022 (an impressive 41% of total revenue), the business produced $1.6 billion in just the first quarter this year, good for an incredible 87% FCF margin

Moreover, Airbnb benefits from unrivaled network effects, a powerful competitive advantage that helps it keep smaller rivals in the industry at bay. As more hosts post their dwellings on the site, the service becomes more valuable to travelers due to the greater availability of listings. And as these customers frequent the site in greater numbers, hosts benefit from a growing customer base.

Since its initial public offering, shares have more than doubled. However, they're still down 35% from their all-time high, despite a 63% gain year to date. The stock currently trades at a trailing price-to-earnings (P/E) ratio of 46, below its historical average, and its valuation multiple falls to just 25 on a free-cash-flow basis.

Etsy 

Etsy's business was flourishing during the worst days of the pandemic as consumer spending rapidly shifted online. Gross merchandise sales (GMS) and revenue initially soared, as did users on the platform. This was quite the opposite of the situation for Airbnb. 

But over the past several quarters, Etsy has been experiencing a noticeable slowdown from its pandemic highs as consumer behavior has normalized, and discretionary spending remains under pressure. In 2022, GMS declined 1%, while revenue was up 10%. These figures weren't what investors had grown used to in 2020 and 2021, a period that saw GMS and revenue average 65% and 77% annual growth, respectively. And during the first quarter of 2023, GMS fell another 5% year over year with net income down 13%.

It's not all bad news, though. Most consumer-facing businesses were dealt a blow last year thanks to high inflation and interest rates. Etsy was no different, but the company has some favorable qualities that investors can appreciate. 

First, it runs a capital-light business model. Etsy doesn't own any inventory itself, nor does it have to worry about warehousing, shipping, or logistics like most e-commerce businesses. This means the company generates lots of FCF, even after investing in marketing and product development. 

And because online shopping still has a long way to go in terms of penetrating overall retail, Etsy is staring at a sizable growth runway in the decade ahead. This can help to drive higher GMS, revenue, and user gains. 

Although Etsy's stock remains 69% off its peak price, it has still posted a respectable gain of 114% over the past five years. With shares now trading at just half their trailing-five-year average P/E, this looks like a good buying opportunity.