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Scoop Up These 4 GARP Stocks 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. Sprouts Farmers Market, Adobe, GE Aerospace and ResMed 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 the 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.
Here are four stocks from the eight that made it through the screening process:
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.
This Zacks Rank #1 stock has returned 31% in the year-to-date period. It has a trailing four-quarter earnings surprise of 16.5%, on average. The Zacks Consensus Estimate for SFM’s 2025 earnings has remained steady at $5.08 per share over the past 30 days. You can see the complete list of today's Zacks #1 Rank stocks here.
Adobe’s tools, like Acrobat AI Assistant and Adobe Express, are attracting business professionals and creators. Acrobat AI Assistant uses conversational interfaces to make it easier for users to read digital documents and gain insights within a short timeframe. Adobe Express is using AI to enable consumers to quickly design and publish content through conversational AI in an easy-to-use, all-in-one application. Adobe’s monthly active users across these categories surpassed more than 700 million users at the end of the second quarter of fiscal 2025.
The Firefly App is attracting users for AI-powered content ideation, creation and production, and its support for third-party models, including from Alphabet division Google’s Imagen and Veo, Microsoft-backed OpenAI’s image generation and Black Forest Labs’ Flux. Adobe Firefly App availability on mobile is expected to further boost its popularity.
This Zacks Rank #2 stock has declined 14% in the year-to-date period. It has a trailing four-quarter earnings surprise of 2.53%, on average. The Zacks Consensus Estimate for ADBE’s fiscal 2025 earnings has moved north by 1.2% to $20.6 per share over the past 30 days.
GE Aerospace is a leading designer, developer and producer of jet engines, components and integrated systems for military, commercial and business aircraft. The company is well-known for its aero-derivative gas turbines for marine applications.
GE Aerospace has been witnessing strength in its businesses, driven by robust demand for commercial engines, propulsion and additive technologies. Rising U.S. & international defense budgets, geopolitical tensions, positive airline & airframer dynamics and robust demand for commercial air travel augur well for the company. Its portfolio-reshaping actions are likely to unlock value for its shareholders. For 2025, GE Aerospace expects organic revenues to grow in the low double-digit range from the year-ago level.
This Zacks Rank #2 stock has surged 49.1% in the year-to-date period. It has a trailing four-quarter earnings surprise of 17.97%, on average. The Zacks Consensus Estimate for GE’s 2025 earnings has moved north by 0.2% to $5.51 per share over the past 30 days.
Resmed holds a major position as designer, manufacturer, as well as a distributor in the worldwide market for generators, masks, and related accessories for the treatment of sleep-disordered breathing and other respiratory disorders. The company has successfully introduced a full suite of masks in its AirFit, AirTouch and other ranges. Further, to promote greater patient adherence, Resmed offers advanced and
expanded integrations of its therapy-based software solutions, including AirView. The company’s AirFit F40 is performing extremely well in the U.S. market.
The company’s two key global customer-facing software products — AirView and myAir — are 100% in the cloud. Currently, Resmed is investing in a portfolio of artificial intelligence-driven capabilities, as well as customer-facing AI products in its ecosystem. The company has continued to roll out these products in its AirView ecosystem, such as Compliance Coach in the United States. These AI-driven data products will provide personalized suggestions to increase patient therapy adherence and ultimately improve patient outcomes.
This Zacks Rank #2 stock has returned 11.9% in the year-to-date period. It has a trailing four-quarter earnings surprise of 4.23%, on average. The Zacks Consensus Estimate for RMD’s fiscal 2025 earnings has remained steady at $9.48 per share over the past 30 days.
You can get the rest of the 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.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks.com featured highlights Sprouts Farmers Market, Adobe, GE Aerospace and ResMed
For Immediate Release
Chicago, IL – June 26, 2025 – The stocks in this week’s article are Sprouts Farmers Market (SFM - Free Report) , Adobe (ADBE - Free Report) , GE Aerospace (GE - Free Report) and ResMed (RMD - Free Report) .
Scoop Up These 4 GARP Stocks 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. Sprouts Farmers Market, Adobe, GE Aerospace and ResMed 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 the 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.
Here are four stocks from the eight that made it through the screening process:
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.
This Zacks Rank #1 stock has returned 31% in the year-to-date period. It has a trailing four-quarter earnings surprise of 16.5%, on average. The Zacks Consensus Estimate for SFM’s 2025 earnings has remained steady at $5.08 per share over the past 30 days. You can see the complete list of today's Zacks #1 Rank stocks here.
Adobe’s tools, like Acrobat AI Assistant and Adobe Express, are attracting business professionals and creators. Acrobat AI Assistant uses conversational interfaces to make it easier for users to read digital documents and gain insights within a short timeframe. Adobe Express is using AI to enable consumers to quickly design and publish content through conversational AI in an easy-to-use, all-in-one application. Adobe’s monthly active users across these categories surpassed more than 700 million users at the end of the second quarter of fiscal 2025.
The Firefly App is attracting users for AI-powered content ideation, creation and production, and its support for third-party models, including from Alphabet division Google’s Imagen and Veo, Microsoft-backed OpenAI’s image generation and Black Forest Labs’ Flux. Adobe Firefly App availability on mobile is expected to further boost its popularity.
This Zacks Rank #2 stock has declined 14% in the year-to-date period. It has a trailing four-quarter earnings surprise of 2.53%, on average. The Zacks Consensus Estimate for ADBE’s fiscal 2025 earnings has moved north by 1.2% to $20.6 per share over the past 30 days.
GE Aerospace is a leading designer, developer and producer of jet engines, components and integrated systems for military, commercial and business aircraft. The company is well-known for its aero-derivative gas turbines for marine applications.
GE Aerospace has been witnessing strength in its businesses, driven by robust demand for commercial engines, propulsion and additive technologies. Rising U.S. & international defense budgets, geopolitical tensions, positive airline & airframer dynamics and robust demand for commercial air travel augur well for the company. Its portfolio-reshaping actions are likely to unlock value for its shareholders. For 2025, GE Aerospace expects organic revenues to grow in the low double-digit range from the year-ago level.
This Zacks Rank #2 stock has surged 49.1% in the year-to-date period. It has a trailing four-quarter earnings surprise of 17.97%, on average. The Zacks Consensus Estimate for GE’s 2025 earnings has moved north by 0.2% to $5.51 per share over the past 30 days.
Resmed holds a major position as designer, manufacturer, as well as a distributor in the worldwide market for generators, masks, and related accessories for the treatment of sleep-disordered breathing and other respiratory disorders. The company has successfully introduced a full suite of masks in its AirFit, AirTouch and other ranges. Further, to promote greater patient adherence, Resmed offers advanced and
expanded integrations of its therapy-based software solutions, including AirView. The company’s AirFit F40 is performing extremely well in the U.S. market.
The company’s two key global customer-facing software products — AirView and myAir — are 100% in the cloud. Currently, Resmed is investing in a portfolio of artificial intelligence-driven capabilities, as well as customer-facing AI products in its ecosystem. The company has continued to roll out these products in its AirView ecosystem, such as Compliance Coach in the United States. These AI-driven data products will provide personalized suggestions to increase patient therapy adherence and ultimately improve patient outcomes.
This Zacks Rank #2 stock has returned 11.9% in the year-to-date period. It has a trailing four-quarter earnings surprise of 4.23%, on average. The Zacks Consensus Estimate for RMD’s fiscal 2025 earnings has remained steady at $9.48 per share over the past 30 days.
You can get the rest of the 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.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2553279/scoop-up-these-4-garp-stocks-to-receive-handsome-returns
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.