What happened Shares of Etsy (NASDAQ: ETSY) were down 3.5% as of 1:21 p.m. ET on Monday after a Needham analyst issued a bearish take on the company's ability to deliver satisfactory growth amid economic headwinds. The stock is down 62% year to date, underperforming the Nasdaq Composite's decline of 25%. So what Needham analyst Anna Andreeva downgraded the stock to a hold from a buy rating, citing a weakening economic picture in the short term. However, Andreeva still likes the company's long-term potential to become a go-to destination for buyers and sellers, given Etsy's unique positioning as a marketplace for one-of-a-kind items. She also sees a big opportunity for Etsy to drive a higher rate of frequent shoppers. The call comes after Etsy saw its first-quarter revenue significantly decelerate from the end of 2021. After reporting a strong 35% increase in revenue for the fourth quarter, Etsy saw its gross merchandise sales slow down considerably to start the year, driving revenue up only 3.5% year over year. Now what It's a given that consumer discretionary companies are not going to post stellar results in a tough economic environment, especially with higher prices for goods eating into consumers' buying power. But when top stocks decline on these temporary speed bumps, it presents a great opportunity to buy shares at prices that may undershoot a company's long-term value. Buying companies less than their worth is a strategy that has been used by the greatest investors to build tremendous wealth through the stock market. Etsy currently trades at a price-to-earnings ratio of just 21.7 times this year's consensus earnings estimate. That's not much of a premium for a leading e-commerce brand with above-average growth prospects, and investors usually only the get chance to buy great companies this cheap during severe downturns in the stock market. 10 stocks we like better than EtsyWhen our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* They just revealed what they believe are the ten best stocks for investors to buy right now... and Etsy wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of June 2, 2022 John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Etsy. The Motley Fool has a disclosure policy.Source