We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
4 GARP Stocks That Investors Can Scoop Up for Maximum Returns
Read MoreHide Full Article
Key Takeaways
{\"0\":\"GARP strategy identifies undervalued stocks with solid growth prospects for maximum returns.\",\"1\":\"GARP combines value metrics like P/E ratios with growth rates between 10% and 25%.\",\"2\":\"NVDA, RL, SFM and HWM represent promising GARP opportunities with strong fundamentals.\"}
Growth at a reasonable price, or GARP, is an excellent strategy to earn quick investment profits. The GARP approach helps identify stocks priced below the market or any suitable target determined by a fundamental analysis.
The strategy helps investors gain exposure to stocks with impressive prospects and trading at a discount. GARP stocks have solid prospects in terms of cash flow, revenues, earnings per share (EPS) and other metrics.
A portfolio based on the GARP strategy comprises stocks that offer the best value and growth investment. NVIDIA (NVDA - Free Report) , Ralph Lauren (RL - Free Report) , Sprouts Farmers Market (SFM - Free Report) and Howmet Aerospace (HWM - Free Report) are some promising GARP stocks.
GARP Metrics — Mix of Growth & Value Metrics
The GARP strategy offers ideal investment options, utilizing the best value and growth investing features. Investors adopting the GARP approach prefer stocks priced below the market or any reasonable target determined by fundamental analysis. The stocks have solid prospects based on cash flow, revenues, EPS, etc.
Growth Metrics
A strong earnings growth history and impressive earnings prospects are the primary concepts that GARP investors borrow from the growth investing strategy. However, instead of super-normal rates, pursuing stocks with a more stable and reasonable growth rate is a tactic of GARP investors. The GARP strategy considers growth rates between 10% and 20% ideal.
Another metric considered by growth and GARP investors is return on equity (ROE). GARP investors look for strong and higher ROE than the industry average to identify superior stocks. Moreover, stocks with a positive cash flow find precedence under the GARP plan.
Value Metrics
GARP investing prioritizes one of the popular value metrics — the price-to-earnings (P/E) ratio. The investing style picks stocks with higher P/E ratios than value investors, but it avoids companies with extremely high P/E ratios. The price-to-book value (P/B) ratio is also taken into consideration.
Using the GARP principle, we have run a screen to identify stocks that should offer solid returns in the near term.
Last five-year EPS & projected 3-5-year EPS growth rates between 10% and 25% (Strong EPS growth history and prospects ensure improving business.)
ROE (in the past 12 months) greater than the industry average (Higher ROE than the industry average indicates superior stocks.)
P/E and P/B ratios are less than the M-industry average (P/E and P/B ratios less than the industry indicate that the stocks are undervalued.)
Here are four out of the 12 stocks that made it through the screen. Each of the four stocks carries a Zacks Rank #2.
NVIDIA is benefiting from the strong growth of AI and high-performance accelerated computing. The growing demand for generative AI and large language models using graphics processing units (GPUs) based on NVIDIA’s Hopper and Blackwell architectures is aiding data center revenues. The company’s networking business, including NVLink and Spectrum-X, is also contributing to growth by enabling faster and more efficient data movement within AI clusters. These add-ons make NVIDIA’s full-stack approach more appealing to enterprises and governments building AI infrastructure.
The continued ramp-up of Ada RTX GPU workstations in the ProViz end market, following the normalization of channel inventory, is acting as a tailwind. Collaborations with more than 320 automakers and tier-one suppliers are likely to advance its presence in the autonomous vehicle space. We expect NVIDIA’s revenues to witness a CAGR of 31% through fiscal 2026-2028.
The stock has returned 32.4% in the year-to-date period. It has a trailing four-quarter earnings surprise of 3.56%, on average. The Zacks Consensus Estimate for NVDA’s fiscal 2026 earnings has moved 4.2% north to $4.44 per share over the past 30 days.
Ralph Lauren is benefiting from investor confidence in its robust brand equity, successful execution of its strategic transformation and consistent performance across geographies and channels. RL’s strong pricing power, margin expansion, disciplined inventory and real estate management are key growth drivers for the long term.
Innovations like predictive buying and AI-enabled planning are improving inventory efficiency and responsiveness. Across platforms owned, wholesale and social, Ralph Lauren is not just keeping pace with digital trends but actively shaping them, creating immersive, emotionally resonant brand experiences that fuel both consumer loyalty and higher-margin sales.
Ralph Lauren is also making smart investments in prime real estate to future-proof its presence, such as acquiring its Polo flagship in SoHo and aligning with a broader DTC-led growth strategy that continues to strengthen profitability.
The stock has returned 36.4% in the year-to-date period. It has a trailing four-quarter earnings surprise of 8.49%, on average. The Zacks Consensus Estimate for RL’s fiscal 2026 earnings has remained unchanged at $14.77 per share over the past 30 days.
Sprouts Farmers Market’s commitment to providing fresh produce and health-oriented products aligns with increasing consumer demand for healthier food options. The overall market for natural and organic food at home, which SFM targets, is estimated to be around $290 billion within the total $1.6 trillion spent on food at home. Its private-label products continue to gain traction, accounting for 24% of total sales, with 300 new items launched last year, fostering customer loyalty.
Sprouts Farmers plans to open at least 35 new stores in 2025, targeting approximately 10% unit growth, supported by a robust pipeline of 120 approved sites and more than 85 signed leases. Embracing a multi-channel approach, Sprouts Farmers continues to adapt to shifting consumer shopping habits. Significant investments in digital infrastructure, online ordering and delivery services have enhanced customer accessibility.
The stock has returned 7% in the year-to-date period. It has a trailing four-quarter earnings surprise of 13.42%, on average. The Zacks Consensus Estimate for SFM’s 2025 earnings has moved north by 0.8% to $5.28 per share over the past 30 days.
Howmet Aerospace provides engineered solutions for customers in the transportation and aerospace (both defense and commercial) industries.
Howmet is benefiting from solid momentum in the commercial aerospace market, driven by robust build rates and wide-body aircraft recovery. The company is also witnessing strength in its defense aerospace business on the back of rising U.S. & international defense budgets. Robust orders for engine spares for the F-35 program, spares and new builds for legacy fighters augur well. Given the strength in most of its served markets, Howmet has built a sound liquidity position that supports its shareholder-friendly policies. In August 2025, the company announced a 20% hike in its quarterly dividend.
This stock has surged 69.9% in the year-to-date period. It has a trailing four-quarter earnings surprise of 7.08%, on average. The Zacks Consensus Estimate for HWM’s 2025 earnings has remained unchanged at $3.57 per share over the past 30 days.
You can get the remaining stocks on this list by signing up now for a 2-week free trial to the Research Wizard stock picking and backtesting software. You can also create your own strategies and test them first before making investments.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in and see what gems come out.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Image: Bigstock
4 GARP Stocks That Investors Can Scoop Up for Maximum Returns
Key Takeaways
Growth at a reasonable price, or GARP, is an excellent strategy to earn quick investment profits. The GARP approach helps identify stocks priced below the market or any suitable target determined by a fundamental analysis.
The strategy helps investors gain exposure to stocks with impressive prospects and trading at a discount. GARP stocks have solid prospects in terms of cash flow, revenues, earnings per share (EPS) and other metrics.
A portfolio based on the GARP strategy comprises stocks that offer the best value and growth investment. NVIDIA (NVDA - Free Report) , Ralph Lauren (RL - Free Report) , Sprouts Farmers Market (SFM - Free Report) and Howmet Aerospace (HWM - Free Report) are some promising GARP stocks.
GARP Metrics — Mix of Growth & Value Metrics
The GARP strategy offers ideal investment options, utilizing the best value and growth investing features. Investors adopting the GARP approach prefer stocks priced below the market or any reasonable target determined by fundamental analysis. The stocks have solid prospects based on cash flow, revenues, EPS, etc.
Growth Metrics
A strong earnings growth history and impressive earnings prospects are the primary concepts that GARP investors borrow from the growth investing strategy. However, instead of super-normal rates, pursuing stocks with a more stable and reasonable growth rate is a tactic of GARP investors. The GARP strategy considers growth rates between 10% and 20% ideal.
Another metric considered by growth and GARP investors is return on equity (ROE). GARP investors look for strong and higher ROE than the industry average to identify superior stocks. Moreover, stocks with a positive cash flow find precedence under the GARP plan.
Value Metrics
GARP investing prioritizes one of the popular value metrics — the price-to-earnings (P/E) ratio. The investing style picks stocks with higher P/E ratios than value investors, but it avoids companies with extremely high P/E ratios. The price-to-book value (P/B) ratio is also taken into consideration.
Using the GARP principle, we have run a screen to identify stocks that should offer solid returns in the near term.
Screening Parameters
Along with the criteria discussed in the above section, we have considered a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Last five-year EPS & projected 3-5-year EPS growth rates between 10% and 25% (Strong EPS growth history and prospects ensure improving business.)
ROE (in the past 12 months) greater than the industry average (Higher ROE than the industry average indicates superior stocks.)
P/E and P/B ratios are less than the M-industry average (P/E and P/B ratios less than the industry indicate that the stocks are undervalued.)
Here are four out of the 12 stocks that made it through the screen. Each of the four stocks carries a Zacks Rank #2.
NVIDIA is benefiting from the strong growth of AI and high-performance accelerated computing. The growing demand for generative AI and large language models using graphics processing units (GPUs) based on NVIDIA’s Hopper and Blackwell architectures is aiding data center revenues. The company’s networking business, including NVLink and Spectrum-X, is also contributing to growth by enabling faster and more efficient data movement within AI clusters. These add-ons make NVIDIA’s full-stack approach more appealing to enterprises and governments building AI infrastructure.
The continued ramp-up of Ada RTX GPU workstations in the ProViz end market, following the normalization of channel inventory, is acting as a tailwind. Collaborations with more than 320 automakers and tier-one suppliers are likely to advance its presence in the autonomous vehicle space. We expect NVIDIA’s revenues to witness a CAGR of 31% through fiscal 2026-2028.
The stock has returned 32.4% in the year-to-date period. It has a trailing four-quarter earnings surprise of 3.56%, on average. The Zacks Consensus Estimate for NVDA’s fiscal 2026 earnings has moved 4.2% north to $4.44 per share over the past 30 days.
Ralph Lauren is benefiting from investor confidence in its robust brand equity, successful execution of its strategic transformation and consistent performance across geographies and channels. RL’s strong pricing power, margin expansion, disciplined inventory and real estate management are key growth drivers for the long term.
Innovations like predictive buying and AI-enabled planning are improving inventory efficiency and responsiveness. Across platforms owned, wholesale and social, Ralph Lauren is not just keeping pace with digital trends but actively shaping them, creating immersive, emotionally resonant brand experiences that fuel both consumer loyalty and higher-margin sales.
Ralph Lauren is also making smart investments in prime real estate to future-proof its presence, such as acquiring its Polo flagship in SoHo and aligning with a broader DTC-led growth strategy that continues to strengthen profitability.
The stock has returned 36.4% in the year-to-date period. It has a trailing four-quarter earnings surprise of 8.49%, on average. The Zacks Consensus Estimate for RL’s fiscal 2026 earnings has remained unchanged at $14.77 per share over the past 30 days.
Sprouts Farmers Market’s commitment to providing fresh produce and health-oriented products aligns with increasing consumer demand for healthier food options. The overall market for natural and organic food at home, which SFM targets, is estimated to be around $290 billion within the total $1.6 trillion spent on food at home. Its private-label products continue to gain traction, accounting for 24% of total sales, with 300 new items launched last year, fostering customer loyalty.
Sprouts Farmers plans to open at least 35 new stores in 2025, targeting approximately 10% unit growth, supported by a robust pipeline of 120 approved sites and more than 85 signed leases. Embracing a multi-channel approach, Sprouts Farmers continues to adapt to shifting consumer shopping habits. Significant investments in digital infrastructure, online ordering and delivery services have enhanced customer accessibility.
The stock has returned 7% in the year-to-date period. It has a trailing four-quarter earnings surprise of 13.42%, on average. The Zacks Consensus Estimate for SFM’s 2025 earnings has moved north by 0.8% to $5.28 per share over the past 30 days.
Howmet Aerospace provides engineered solutions for customers in the transportation and aerospace (both defense and commercial) industries.
Howmet is benefiting from solid momentum in the commercial aerospace market, driven by robust build rates and wide-body aircraft recovery. The company is also witnessing strength in its defense aerospace business on the back of rising U.S. & international defense budgets. Robust orders for engine spares for the F-35 program, spares and new builds for legacy fighters augur well. Given the strength in most of its served markets, Howmet has built a sound liquidity position that supports its shareholder-friendly policies. In August 2025, the company announced a 20% hike in its quarterly dividend.
This stock has surged 69.9% in the year-to-date period. It has a trailing four-quarter earnings surprise of 7.08%, on average. The Zacks Consensus Estimate for HWM’s 2025 earnings has remained unchanged at $3.57 per share over the past 30 days.
You can get the remaining stocks on this list by signing up now for a 2-week free trial to the Research Wizard stock picking and backtesting software. You can also create your own strategies and test them first before making investments.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in and see what gems come out.
Click here to sign up for a free trial of the Research Wizard today.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Disclosure: Performance information for Zacks' portfolios and strategies are available at: https://www.zacks.com/performance.