The broad sell-off that has led to the current bear market has left very few companies unscathed. Even some of the biggest growth companies in the world are now looking more like value plays due to the crash in their stock price. Amazon (AMZN 0.23%) and Walt Disney (DIS 0.09%) are two companies that fit into this category.

It may seem odd to think of these two companies as being a bargain, but a closer look at the current valuation and future business prospects leads me to that conclusion. Let's dive in to see what puts these two companies in the bargain bucket for me. 

1. Amazon

E-commerce is likely the first thing that pops into investors' heads when they hear the word Amazon. This is for good reason as the company is still the No. 1 choice for many of us when we need to purchase something online. However, ever-increasing competition and the capital outlay necessary to hold that top position in the online retail space has introduced some risk to the e-commerce business and contributed to the stock's sell-off. 

The result of this is a price-to-sales multiple of only 2.3 for Amazon, making the stock the cheapest it's been since 2016. If e-commerce was all Amazon had to offer, one could argue that even at 2.3 times sales, the company would be overvalued. Consider that retail competitor Walmart has a P/S of 0.6.

The good news for Amazon is that it also has a cloud infrastructure that is growing faster and has higher margins, providing additional value for shareholders. Amazon Web Services (AWS) is quickly becoming a standout for Amazon. Consider the year-over-year revenue and operating income results for Amazon's three segments.

Segment

Revenue YOY

Operating Income YOY

North America

8%

(145)%

International

6%

(202)%

AWS

37%

57%

Data source: Amazon    YOY=year over year

AWS's outstanding performance resulted in its share of overall revenue increasing to 16%, up from 13% a year ago. Additionally, the operating income results tell us that as AWS becomes a larger part of Amazon's overall business, profitability and margins should improve. And there's good reason to believe that AWS will continue to grow, considering it's already the cloud infrastructure leader and that the cloud infrastructure market is expected to grow approximately 16% a year through 2030.

Another aspect of the company that doesn't get talked about enough is its burgeoning advertising business. In Q1, advertising services accounted for $6.3 billion in revenue, an increase of 23% year over year. While advertising only accounts for 6.8% of overall revenue, that's up from 5.9% in the previous year's Q1. If advertising can become a meaningful portion of Amazon's revenue, that's yet another growth driver for years to come.

2. Disney

Few companies felt the impact of the pandemic more directly than Walt Disney, which saw its parks and cruises completely shut down almost overnight. Considering how the last few years have gone, it's impressive that Disney has been able to get mostly back on track with revenue in Q2 2022 landing at about where it was in Q2 2020, which was the last reported quarter before the full impact of the pandemic hit the business.

One saving grace was the launch of its Disney+ streaming service in 2019. The timing couldn't have been more opportune, with pandemic-induced lockdowns leading to subscriber growth of more than 73 million in the service's first year. This helped fuel a surge in the stock price throughout 2020 and early 2021.

Unfortunately, Disney has come back down to Earth, and today its shares trade at a 52% discount to their 2021 high, resulting in a P/S ratio of 2.3, well below the five-year average of 3.2.

However, I think the stock has been oversold and is now a bargain at this valuation. In Q2 2022, revenue in the parks and entertainment segment grew 110% year over year, its second consecutive quarter of triple-digit growth. Yes, that's coming off two quarters in the prior year when parks were closed or operating at limited capacity, but it demonstrates that this vital part of the business is coming back. 

The media and entertainment segment grew 9% in Q2, and while that's decent growth, what's more important is the success of Disney's streaming offerings. Disney+ had strong subscriber growth of 33%, but ESPN+ actually grew more at 62%, while Hulu increased 10%. This part of the business currently accounts for 25% of revenue, so continued growth here will be meaningful for Disney.

Bargain buys

It's not often that generationally strong companies can be bought for such cheap valuations. While neither of these companies is likely to provide hyper-growth in your portfolio, both have better days ahead of them. Buying the shares at these bargain prices and holding them forever is likely to be rewarding for investors.