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. Stryker SYK, NVIDIA NVDA, ResMed RMD and Ralph Lauren RL 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.

Stryker’s international business remains a long-term growth lever, with double-digit gains in Asia-Pacific and Latin America. The company’s innovation pipeline remains strong, with developments across orthopaedics, trauma, extremities, and endoscopy. Hospitals are actively refreshing capital equipment and investing in advanced surgical technologies, driving greater utilization across Stryker’s broad portfolio. Neurotechnology’s strong growth is fueled by robust demand in craniomaxillofacial and stroke care products. Collectively, these segments provide stability and balance to Stryker’s overall growth trajectory.

The Mako platform is steadily broadening its procedural reach, while upcoming launches in sports medicine and next-generation endoscopy are set to reinforce the company’s competitive positioning. Management noted that Mako procedures surpassed the 2-million milestone in the second quarter, with international markets contributing significantly as hospitals expand their robotic-assisted surgery capabilities. Rising Mako placements are boosting implant volumes and embedding robotics more deeply into orthopedic care. These dynamics reinforce Stryker’s technology leadership and highlight the near-term momentum of robotics in enhancing surgical efficiency and patient outcomes.

The stock has returned 2.6% in the year-to-date period. It has a trailing four-quarter earnings surprise of 3.3%, on average. The Zacks Consensus Estimate for SYK’s 2025 earnings has moved 0.1% north to $13.5 per share over the past 60 days.

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 35.4% 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 4.7% north to $4.45 per share over the past 60 days.

ResMed’s continued product development is driving growth within this business globally. The company’s AirFit F40 is performing extremely well in the U.S. market. It also features AirTouch N30i, the world’s first unique fabric-based patient interface, which was launched in select markets. Early feedback for AirTouch N30i was positive.

ResMed’s increased device sales continue to drive overall revenue growth, reflecting the ongoing combined availability of AirSense 10 and AirSense 11 sleep devices to support strong underlying global demand. In the fourth quarter of fiscal 2025, the company successfully maintained its market leadership, banking on its two AirSense platforms.

This stock has returned 18.1% in the year-to-date period. It has a trailing four-quarter earnings surprise of 4.53%, on average. The Zacks Consensus Estimate for RMD’s fiscal 2026 earnings has remained steady at $10.87 per share over the past 60 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 39.9% 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 moved north by 0.2% to $14.93 per share over the past 60 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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