Add These 4 GARP Stocks to Your Portfolio to Receive Handsome Returns

If you are looking for a profitable portfolio of stocks offering the best of value and growth investing, try the growth at a reasonable price or GARP strategy.

The strategy helps investors gain exposure to undervalued stocks with impressive prospects. Unlike a blend strategy, a portfolio that uses GARP investing is expected to include stocks that offer the best of value and growth investing. Vertiv VRT, Expedia Group EXPE, NVIDIA NVDA and Ralph Lauren RL are some GARP stocks that hold promise.

GARP Metrics: Mix of Growth & Value Metrics

The GARP strategy seeks to offer an ideal investment by utilizing the best features of value and growth investing. Investors adopting the GARP approach prefer buying stocks priced below the market or any reasonable target determined by fundamental analysis. These stocks also have solid prospects in terms of cash flow, revenues, earnings per share (EPS) and so on.

Growth Metrics

A strong earnings growth history and impressive earnings prospects are the main concepts that GARP investors borrow from the growth investing strategy. However, instead of super-normal growth rates, pursuing stocks with a more stable and reasonable growth rate is a tactic of GARP investors. Hence, growth rates between 10% and 20% are considered ideal under the GARP strategy.

Another metric that growth and GARP investors consider is return on equity (ROE). GARP investors look for a strong and higher ROE than the industry average to identify superior stocks. Stocks with positive cash flows find precedence under the GARP plan.

Value Metrics

GARP investing prioritizes popular value metrics — the price-to-earnings (P/E) and price-to-book (P/B) ratios. Though this investing style picks stocks with higher P/E ratios than value investors, it avoids companies with extremely high P/E ratios.

Using the GARP principle, we ran 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).

Last 5-year EPS & projected 3-5-year EPS growth rates between 10% and 25% (Strong EPS growth history and prospects ensure improving business.)

ROE (over the past 12 months) greater than the industry average (Higher ROE than the industry average indicates superior stocks.)

P/E and P/B ratios less than the M-industry average (P/E and P/B ratios less than that of the industry indicate that the stocks are undervalued.)

Here are four stocks from the 11 that made it through the screening process.

Vertiv is benefiting from strong order growth and a robust pipeline, reinforcing its position as a leader in the data center and AI infrastructure market. In the third quarter of 2025, organic orders (excluding foreign exchange) rose 60% year over year and the book-to-bill ratio was roughly 1.4x. Vertiv’s innovative portfolio has been a significant growth driver. It recently introduced OCP-aligned rack, power and cooling solutions. These include the SmartIT OCP rack, PowerIT PDUs, PowerBar Track and CoolChip Fluid Network. They are designed to support high-density, energy-efficient data centers and next-generation AI workloads. 

This Zacks Rank #1 company’s rich partner base, which includes Ballard Power Systems, Compass Datacenters, NVIDIA, Oklo, Intel, ZincFive and Tecogen, is noteworthy. You can see the complete list of today's Zacks #1 Rank stocks here.

The stock has surged 61.4% in the year-to-date period. It has a trailing four-quarter earnings surprise of 14.89%, on average. The Zacks Consensus Estimate for VRT’s 2025 earnings has remained steady at $4.11 per share over the past 30 days.

Expedia’s strong brand portfolio, comprising Brand Expedia, Hotels.com, Vrbo, Orbitz, Travelocity, ebookers and Wotif Group, to name a few, offers a full range of travel and advertising services to travelers, suppliers and business partners. The company benefits from a strong platform model that enhances customer insights, strengthens supplier ties and helps grow revenues. Its diverse brand portfolio, spanning major travel services, enables it to target a broad range of global traveler needs, while boosting traffic and bookings. A broad multi-product supply network, including lodging, airlines, rental cars and cruises, positions it well to capture demand in the growing leisure travel space. Strong liquidity, share buybacks, and dividends further highlight the financial resilience of this Zacks Rank #1 company. 

This stock has surged 38.7% in the year-to-date period. It has a trailing four-quarter earnings surprise of 4.53%, on average. The Zacks Consensus Estimate for EXPE’s 2025 earnings has moved north by 5.7% to $15.09 per share over the past 30 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. This Zacks Rank #1 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 36.6% in the year-to-date period. It has a trailing four-quarter earnings surprise of 2.77%, on average. The Zacks Consensus Estimate for NVDA’s fiscal 2026 earnings has moved north by 3.6% to $4.62 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.

This Zacks Rank #2 company is gaining from the strategic execution of its “Next Great Chapter: Accelerate Plan” and robust financial performance. The plan focuses on brand elevation, consumer centricity and operational agility. Digital transformation drives growth, with investments in personalization, mobile, omnichannel, and fulfillment enhancing consumer engagement. Retail and wholesale remain key pillars, with flagship stores, premium distribution, and partnerships boosting comparable sales across North America, Europe and Asia in the second quarter of fiscal 2026. 

The stock has returned 54.5% in the year-to-date period. It has a trailing four-quarter earnings surprise of 9.82%, on average. The Zacks Consensus Estimate for RL’s fiscal 2026 earnings has moved north by 2.7% to $15.41 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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