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Add These 4 GARP Stocks to Your Portfolio to Receive Handsome Returns
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Key Takeaways
The GARP strategy identifies undervalued stocks with solid growth prospects for maximum returns.
GARP combines value metrics like P/E ratios with growth rates between 10% and 25%.
TPR, CHWY, ROST and NVDA represent promising GARP opportunities with strong fundamentals.
If you are looking for a profitable portfolio of stocks offering the best of value and growth investing, you can 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. Tapestry (TPR - Free Report) , Chewy (CHWY - Free Report) , Ross Stores (ROST - Free Report) and NVIDIA (NVDA - Free Report) 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.
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 six that made it through the screening process.
Tapestry’s fiscal third-quarter revenues of $1.92 billion increased 21% year over year, with GAAP operating margin expanding 630 basis points to 22.3%. Coach, the flagship brand of Tapestry, delivered 31% revenue growth, driven by handbag unit gains exceeding 20% and low double-digit AUR increases. Greater China surged 61%, while North America and Europe grew 20% and 31%, respectively. The company added more than 2.4 million new customers, with Gen Z representing over 35% of additions. Direct-to-consumer revenues grew 23% in constant currency. Tapestry raised full-year revenue, margin, EPS, and cash flow guidance, lifting shareholder return targets to $1.6 billion. The April 2026 board appointment of Pinterest's chief technology officer strengthens Tapestry's digital growth strategy.
The Zacks Consensus Estimate for Tapestry’s fiscal 2026 earnings has moved north by 7.6% to $6.95 per share in the past 30 days. This Zacks Rank #2 company surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 15.59%.
NVIDIA’s fiscal 2026 revenues were $215.9 billion, up 65% year over year, with fourth-quarter Data Center revenues reaching $62.3 billion — a 75% annual increase. Non-GAAP gross margins expanded to 75.2% in the fourth quarter. The company guided fiscal first-quarter 2027 revenues of $78 billion, sustaining its growth trajectory. Recent announcements highlight expanding demand drivers: a May 2026 partnership with OpenAI targets deployment of at least 10 gigawatts of NVIDIA systems on the forthcoming Vera Rubin platform. A separate IREN collaboration targets up to 5 gigawatts of DSX-aligned AI infrastructure globally. A multiyear Corning partnership will scale U.S. optical connectivity manufacturing tenfold. Meanwhile, the Jetson AGX Thor platform's general availability meaningfully broadens NVIDIA’s addressable market into physical AI and robotics.
The Zacks Consensus Estimate for NVIDIA’s fiscal 2027 earnings has moved north by 1.6% to $8.16 per share in the past 60 days. This Zacks Rank #2 company surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 2.93%.
Chewy‘s fiscal 2025 net sales grew 8.3% on a normalized basis to $12.60 billion, gross margin expanded 60 basis points to 29.8%, and adjusted EBITDA climbed 26.1% to $719.2 million. Its record free cash flow of $562.4 million and 21.3 million active customers, up 4% year over year, reinforce its subscription-driven model, with Autoship representing 83.3% of net sales. In April 2026, Chewy announced the acquisition of Modern Animal, a 29-clinic veterinary platform, which instantly expanded Chewy Vet Care from 18 to 47 locations and added more than $125 million in annualized run-rate revenues. The board authorized a $500 million increase to the share repurchase program. Management guided fiscal 2026 net sales of $13.6–$13.75 billion.
The consensus estimate for this Zacks Rank #2 company’s fiscal 2026 earnings has moved north by 4.5% to $1.63 per share in the past 60 days. Its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, while missing once, the average surprise being 1.51%.
Ross Stores ended fiscal 2025 on a strong footing, posting record net sales of $22.8 billion, up 8% year over year, with fourth-quarter comparable store sales growing 9%. The company's off-price model—delivering brand-name merchandise at 20% to 60% below regular retail prices—continues to gain traction with value-focused consumers. For fiscal 2026, Ross targets approximately 110 new store openings, representing 5% unit growth, toward a long-term goal of 2,900 Ross and 700 dd's DISCOUNTS locations. In March 2026, the board authorized a $2.55 billion stock repurchase program, 21% above the prior plan, alongside a 10% quarterly dividend increase to $0.445 per share. The company holds $4.6 billion in cash ahead of the May 21, 2026, first-quarter earnings release.
The consensus estimate for this Zacks Rank #2 company’s fiscal 2026 earnings has moved north by 1.7% to $7.32 per share in the past 60 days. The company surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 6.17%.
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Add These 4 GARP Stocks to Your Portfolio to Receive Handsome Returns
Key Takeaways
If you are looking for a profitable portfolio of stocks offering the best of value and growth investing, you can 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. Tapestry (TPR - Free Report) , Chewy (CHWY - Free Report) , Ross Stores (ROST - Free Report) and NVIDIA (NVDA - Free Report) 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). You can see the complete list of today's Zacks #1 Rank stocks here.
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 six that made it through the screening process.
Tapestry’s fiscal third-quarter revenues of $1.92 billion increased 21% year over year, with GAAP operating margin expanding 630 basis points to 22.3%. Coach, the flagship brand of Tapestry, delivered 31% revenue growth, driven by handbag unit gains exceeding 20% and low double-digit AUR increases. Greater China surged 61%, while North America and Europe grew 20% and 31%, respectively. The company added more than 2.4 million new customers, with Gen Z representing over 35% of additions. Direct-to-consumer revenues grew 23% in constant currency. Tapestry raised full-year revenue, margin, EPS, and cash flow guidance, lifting shareholder return targets to $1.6 billion. The April 2026 board appointment of Pinterest's chief technology officer strengthens Tapestry's digital growth strategy.
The Zacks Consensus Estimate for Tapestry’s fiscal 2026 earnings has moved north by 7.6% to $6.95 per share in the past 30 days. This Zacks Rank #2 company surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 15.59%.
NVIDIA’s fiscal 2026 revenues were $215.9 billion, up 65% year over year, with fourth-quarter Data Center revenues reaching $62.3 billion — a 75% annual increase. Non-GAAP gross margins expanded to 75.2% in the fourth quarter. The company guided fiscal first-quarter 2027 revenues of $78 billion, sustaining its growth trajectory. Recent announcements highlight expanding demand drivers: a May 2026 partnership with OpenAI targets deployment of at least 10 gigawatts of NVIDIA systems on the forthcoming Vera Rubin platform. A separate IREN collaboration targets up to 5 gigawatts of DSX-aligned AI infrastructure globally. A multiyear Corning partnership will scale U.S. optical connectivity manufacturing tenfold. Meanwhile, the Jetson AGX Thor platform's general availability meaningfully broadens NVIDIA’s addressable market into physical AI and robotics.
The Zacks Consensus Estimate for NVIDIA’s fiscal 2027 earnings has moved north by 1.6% to $8.16 per share in the past 60 days. This Zacks Rank #2 company surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 2.93%.
Chewy‘s fiscal 2025 net sales grew 8.3% on a normalized basis to $12.60 billion, gross margin expanded 60 basis points to 29.8%, and adjusted EBITDA climbed 26.1% to $719.2 million. Its record free cash flow of $562.4 million and 21.3 million active customers, up 4% year over year, reinforce its subscription-driven model, with Autoship representing 83.3% of net sales. In April 2026, Chewy announced the acquisition of Modern Animal, a 29-clinic veterinary platform, which instantly expanded Chewy Vet Care from 18 to 47 locations and added more than $125 million in annualized run-rate revenues. The board authorized a $500 million increase to the share repurchase program. Management guided fiscal 2026 net sales of $13.6–$13.75 billion.
The consensus estimate for this Zacks Rank #2 company’s fiscal 2026 earnings has moved north by 4.5% to $1.63 per share in the past 60 days. Its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, while missing once, the average surprise being 1.51%.
Ross Stores ended fiscal 2025 on a strong footing, posting record net sales of $22.8 billion, up 8% year over year, with fourth-quarter comparable store sales growing 9%. The company's off-price model—delivering brand-name merchandise at 20% to 60% below regular retail prices—continues to gain traction with value-focused consumers. For fiscal 2026, Ross targets approximately 110 new store openings, representing 5% unit growth, toward a long-term goal of 2,900 Ross and 700 dd's DISCOUNTS locations. In March 2026, the board authorized a $2.55 billion stock repurchase program, 21% above the prior plan, alongside a 10% quarterly dividend increase to $0.445 per share. The company holds $4.6 billion in cash ahead of the May 21, 2026, first-quarter earnings release.
The consensus estimate for this Zacks Rank #2 company’s fiscal 2026 earnings has moved north by 1.7% to $7.32 per share in the past 60 days. The company surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 6.17%.