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4 Low-PEG GARP Stocks That Perfectly Balance Growth and Value
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Key Takeaways
These four low-PEG GARP stocks balance undervaluation with solid, sustainable growth prospects.
Carnival and Micron feature discounted valuations and impressive long-term growth near 28.5%.
Synchrony and Ericsson combine strong Value Scores with double-digit or steady growth potential.
Over the past few months, the market cacophony has made hybrid investment particularly relevant. While volatility remains elevated amid global policy uncertainty and uneven sectoral growth, the broader earnings picture has strengthened. For example, the blended earnings growth rate for the S&P 500 in the third quarter of 2025 is 13.7%, with 86.9% of companies beating EPS estimates (Zacks Earnings Analysis).
Meanwhile, expectations of a gradual shift in Federal Reserve policy toward rate easing have begun to stabilize discount-rate pressure, improving the risk-reward balance for fundamentally strong companies.
In this environment, investments need to be prudently hedged to overcome uncertainties and limit losses related to external shocks. A question that often arises is whether one should resort to a value strategy that seeks discounted stocks or opt for growth investing in times of extreme market instability.
The investing track of the Oracle of Omaha over the past few decades and his gradual shift from being a pure-play value investor to a GARP (growth at a reasonable price) investor might give us all the answers.
Per the GARP theory, the strategic mingling of growth and value-investing principles gives us a hybrid strategy, offering an ideal investment by utilizing the best features of both. What GARPers look for is whether or not the stocks are somewhat undervalued and have solid, sustainable growth potential (Investopedia).
Several stocks that have surged significantly in recent years have demonstrated the overwhelming success of this hybrid investing strategy over pure-play value and growth investments. Here, we will discuss the success of four such stocks. These are Carnival Corporation (CCL - Free Report) , Micron Technology (MU - Free Report) , Synchrony Financial (SYF - Free Report) and Ericsson (ERIC - Free Report) .
A Few More Words on GARP
GARP investing gives priority to one of the popular value metrics — the price/earnings growth (PEG) ratio. Although it is categorized under value investing, this strategy follows the principles of both growth and value investing.
The PEG ratio is defined as (Price/ Earnings)/Earnings Growth Rate
It relates the stocks’ P/E ratios to the future earnings growth rates.
While P/E alone gives an idea of stocks that are trading at a discount, PEG, while adding the growth element to it, helps identify stocks with solid future potential.
A lower PEG ratio, preferably less than 1, is always better for GARP investors.
Say, for example, if a stock's P/E ratio is 10 and the expected long-term growth rate is 15%, the company's PEG will come down to 0.66, a ratio indicating both undervaluation and future growth potential.
Unfortunately, this ratio is often neglected due to investors' limitations in calculating the future earnings growth rate of a stock.
There are some drawbacks to using the PEG ratio though. It does not consider the very common situation of changing growth rates, such as the forecast of the first three years at a very high growth rate, followed by a sustainable but lower growth rate over the long term.
Hence, PEG-based investing can be even more rewarding if some other relevant parameters are also taken into consideration.
Here are the screening criteria for a winning strategy:
PEG Ratio less than X Industry Median
P/E Ratio (using F1) less than X Industry Median (For more accurate valuation purpose)
Zacks Rank of 1 (Strong Buy) or 2 (Buy) (Whether good market conditions or bad, stocks with a Zacks Rank #1 or #2 have a proven history of success.)
Market Capitalization greater than $1 Billion (This helps us to focus on companies that have strong liquidity.)
Average 20-Day Volume greater than 50,000: A substantial trading volume ensures that the stock is easily tradable.
Percentage Change F1 Earnings Estimate Revisions (4 Weeks) greater than 5%: Upward estimate revisions add to the optimism, suggesting further bullishness.
Value Score of less than or equal to B: Our research shows that stocks with a Value Style Score of A or B, when combined with a Zacks Rank #1, 2 or 3 (Hold), offer the best upside potential.
Our PEG-Driven Picks
Here are four stocks that qualified the screening:
Carnival: Headquartered in Miami, FL, the company operates as a cruise and vacation company. As a single economic entity, Carnival Corporation & Carnival plc forms the largest cruise operator in the world. Carnival is the world’s leading leisure travel firm and carries nearly half of the global cruise guests. The company operates in North America, Australia, Europe and Asia.
CCL stock can be an impressive value investment pick with its Zacks Rank #1 and a Value Score of A. Apart from a discounted PEG and P/E, Carnival also has an impressive long-term historical growth rate of 28.5%.
Micron: Idaho-based Micron Technology has established itself as one of the leading worldwide providers of semiconductor memory solutions. Micron’s latest quarterly performance underscores its strategic positioning in the rapidly expanding AI-driven memory and storage markets. The positive impact of inventory improvement across multiple end markets is adding to top-line growth.
Micron can be an impressive GARP investment pick with its Zacks Rank #1 and a Value Score of B. Apart from a discounted PEG and P/E, the stock has an impressive long-term expected growth rate of 28.5%.
Synchrony Financial: As one of the nation’s premier consumer financial services companies, Synchrony Financial offers a wide range of credit products through a diverse group of national and regional retailers, local merchants, manufacturers, buying groups, industry associations and health and wellness providers. Synchrony Financial focuses on generating financial flexibility for its customers through offerings like private label credit cards, Dual Card and many more.
SYF stock can also be an impressive GARP investment pick with its Zacks Rank #2 and a Value Score of A. Apart from a discounted PEG and P/E, Synchrony Financial has a solid long-term historical growth rate of 13.1%.
Ericsson: Headquartered in Stockholm, Sweden, Ericsson is a leading provider of communication networks, telecom services and support solutions. The company is a leader in telecommunications and is now expanding its role into an ICT (Information and Communications Technology) solutions provider.
ERIC stock can be an impressive value investment pick with its Zacks Rank #2 and a Value Score of B. Apart from a discounted PEG and P/E, Ericsson also has an impressive long-term expected growth rate of 8.4%.
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 Low-PEG GARP Stocks That Perfectly Balance Growth and Value
Key Takeaways
Over the past few months, the market cacophony has made hybrid investment particularly relevant. While volatility remains elevated amid global policy uncertainty and uneven sectoral growth, the broader earnings picture has strengthened. For example, the blended earnings growth rate for the S&P 500 in the third quarter of 2025 is 13.7%, with 86.9% of companies beating EPS estimates (Zacks Earnings Analysis).
Meanwhile, expectations of a gradual shift in Federal Reserve policy toward rate easing have begun to stabilize discount-rate pressure, improving the risk-reward balance for fundamentally strong companies.
In this environment, investments need to be prudently hedged to overcome uncertainties and limit losses related to external shocks. A question that often arises is whether one should resort to a value strategy that seeks discounted stocks or opt for growth investing in times of extreme market instability.
The investing track of the Oracle of Omaha over the past few decades and his gradual shift from being a pure-play value investor to a GARP (growth at a reasonable price) investor might give us all the answers.
Per the GARP theory, the strategic mingling of growth and value-investing principles gives us a hybrid strategy, offering an ideal investment by utilizing the best features of both. What GARPers look for is whether or not the stocks are somewhat undervalued and have solid, sustainable growth potential (Investopedia).
Several stocks that have surged significantly in recent years have demonstrated the overwhelming success of this hybrid investing strategy over pure-play value and growth investments. Here, we will discuss the success of four such stocks. These are Carnival Corporation (CCL - Free Report) , Micron Technology (MU - Free Report) , Synchrony Financial (SYF - Free Report) and Ericsson (ERIC - Free Report) .
A Few More Words on GARP
GARP investing gives priority to one of the popular value metrics — the price/earnings growth (PEG) ratio. Although it is categorized under value investing, this strategy follows the principles of both growth and value investing.
The PEG ratio is defined as (Price/ Earnings)/Earnings Growth Rate
It relates the stocks’ P/E ratios to the future earnings growth rates.
While P/E alone gives an idea of stocks that are trading at a discount, PEG, while adding the growth element to it, helps identify stocks with solid future potential.
A lower PEG ratio, preferably less than 1, is always better for GARP investors.
Say, for example, if a stock's P/E ratio is 10 and the expected long-term growth rate is 15%, the company's PEG will come down to 0.66, a ratio indicating both undervaluation and future growth potential.
Unfortunately, this ratio is often neglected due to investors' limitations in calculating the future earnings growth rate of a stock.
There are some drawbacks to using the PEG ratio though. It does not consider the very common situation of changing growth rates, such as the forecast of the first three years at a very high growth rate, followed by a sustainable but lower growth rate over the long term.
Hence, PEG-based investing can be even more rewarding if some other relevant parameters are also taken into consideration.
Here are the screening criteria for a winning strategy:
PEG Ratio less than X Industry Median
P/E Ratio (using F1) less than X Industry Median (For more accurate valuation purpose)
Zacks Rank of 1 (Strong Buy) or 2 (Buy) (Whether good market conditions or bad, stocks with a Zacks Rank #1 or #2 have a proven history of success.)
Market Capitalization greater than $1 Billion (This helps us to focus on companies that have strong liquidity.)
Average 20-Day Volume greater than 50,000: A substantial trading volume ensures that the stock is easily tradable.
Percentage Change F1 Earnings Estimate Revisions (4 Weeks) greater than 5%: Upward estimate revisions add to the optimism, suggesting further bullishness.
Value Score of less than or equal to B: Our research shows that stocks with a Value Style Score of A or B, when combined with a Zacks Rank #1, 2 or 3 (Hold), offer the best upside potential.
Our PEG-Driven Picks
Here are four stocks that qualified the screening:
Carnival: Headquartered in Miami, FL, the company operates as a cruise and vacation company. As a single economic entity, Carnival Corporation & Carnival plc forms the largest cruise operator in the world. Carnival is the world’s leading leisure travel firm and carries nearly half of the global cruise guests. The company operates in North America, Australia, Europe and Asia.
CCL stock can be an impressive value investment pick with its Zacks Rank #1 and a Value Score of A. Apart from a discounted PEG and P/E, Carnival also has an impressive long-term historical growth rate of 28.5%.
Micron: Idaho-based Micron Technology has established itself as one of the leading worldwide providers of semiconductor memory solutions. Micron’s latest quarterly performance underscores its strategic positioning in the rapidly expanding AI-driven memory and storage markets. The positive impact of inventory improvement across multiple end markets is adding to top-line growth.
Micron can be an impressive GARP investment pick with its Zacks Rank #1 and a Value Score of B. Apart from a discounted PEG and P/E, the stock has an impressive long-term expected growth rate of 28.5%.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Synchrony Financial: As one of the nation’s premier consumer financial services companies, Synchrony Financial offers a wide range of credit products through a diverse group of national and regional retailers, local merchants, manufacturers, buying groups, industry associations and health and wellness providers. Synchrony Financial focuses on generating financial flexibility for its customers through offerings like private label credit cards, Dual Card and many more.
SYF stock can also be an impressive GARP investment pick with its Zacks Rank #2 and a Value Score of A. Apart from a discounted PEG and P/E, Synchrony Financial has a solid long-term historical growth rate of 13.1%.
Ericsson: Headquartered in Stockholm, Sweden, Ericsson is a leading provider of communication networks, telecom services and support solutions. The company is a leader in telecommunications and is now expanding its role into an ICT (Information and Communications Technology) solutions provider.
ERIC stock can be an impressive value investment pick with its Zacks Rank #2 and a Value Score of B. Apart from a discounted PEG and P/E, Ericsson also has an impressive long-term expected growth rate of 8.4%.
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 to 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.