4 GARP Stocks That Investors Can Scoop Up for Maximum Returns

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, Ralph Lauren RL, Sprouts Farmers Market SFM and Howmet Aerospace HWM 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.

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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.

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