(FORTUNE Magazine) - In her first five years as CEO, Andrea Jung gave Avon (Research) a badly needed facelift. From 2000 through 2004, revenues rose from $5.3 billion to $7.7 billion, and profits nearly tripled. That a nearly 120-year-old dowager could become a shining growth company was a beautiful thing.

The positive momentum persuaded FORTUNE to recommend the stock in August 2004, when it traded at $43. Soon after, wrinkles appeared. North American sales began a slide that has lasted for six quarters. The company reduced its earnings forecast for the first time in Jung's tenure. The product pipeline looked shriveled, and competition from P&G (Research) and others intensified. The stock tumbled, hitting a low of $25 last October. Ding-dong, Avon falling.

But things may be looking up, and for patient investors this may be a good time to get in. Citigroup analyst Wendy Nicholson points out that Avon is cleaning up its act, and the results of the turnaround should start to bear fruit in 2007.

The company has recently announced a $500 million restructuring that includes collapsing 15 management layers down to seven or eight. Avon will also double its ad spending in the U.S. market--lack of advertising is one cause the company cites for shrinking U.S. sales.

"Our call is definitely to buy it today," says Nicholson.

Avon has just won approval to conduct direct selling in China--the first approval for a U.S. company since China banned the practice in 1998. It will take a few years to recruit and educate an army of Avon ladies. Still, Avon should be able to pull it off--after all, it rakes in 69% of its sales from overseas. "Avon has done such a good job in other emerging markets," says Nicholson. "The long-term opportunity in China is huge."