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4 High-Growth GARP Stocks With Discounted PEG Ratios for 2026
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Key Takeaways
Brinker pairs a discounted PEG and P/E with a 14.6% long-term expected growth rate.
Dollar Tree combines discounted valuation metrics with a 13.6% five-year expected growth rate.
Halozyme and CACI offer discounted PEGs and P/Es with strong long-term growth rates.
In the equity market, 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 Brinker International (EAT - Free Report) , Dollar Tree (DLTR - Free Report) , Halozyme Therapeutics (HALO - Free Report) and CACI International (CACI - 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, the addition of 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.
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 purposes)
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 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.
Growth Score of less than or equal to B: Our research shows that stocks with a Growth Style Score of A or B, when combined with a Zacks Rank #1, 2 or 3, offer the best upside potential.
Our PEG-Driven Picks
Here are four stocks that qualified the screening:
Brinker: This company operates Chili’s Grill & Bar and Maggiano’s Little Italy, offering casual dining across U.S. and international markets. Chili’s focuses on burgers, fajitas, ribs and value offerings, while Maggiano’s serves Italian-American cuisine, including pasta, seafood and steaks, with banquet facilities at most locations.
EAT can be an impressive GARP investment pick with its Zacks Rank #2, a Value Score of B and a Growth Score of A. Apart from a discounted PEG and P/E, the stock has an impressive long-term expected growth rate of 14.6%.
Dollar Tree: Headquartered in Chesapeake, VA, Dollar Tree operates discount variety stores offering everyday consumables and discretionary merchandise across the United States and Canada. Its Dollar Tree banner features a growing multi-price format, while DollarTree.com provides bulk merchandise online and supports store traffic through promotions, events and seasonal offerings.
DLTR carries a Zacks Rank #2 at present, along with a Value Score of A and a Growth Score of A. Dollar Tree also has an impressive five-year expected growth rate of 13.6%.
Halozyme: San Diego, CA-based Halozyme develops and commercializes oncology treatments while licensing its ENHANZE drug-delivery technology for subcutaneous formulations. The company earns most revenues from royalties on partnered drugs. Royalties exceeded 55% of 2025 revenues. Total revenues reached $1.39 billion, up 38% year over year.
Halozyme stock can be an impressive GARP investment pick with its Zacks Rank #2, a Value Score of B and a Growth Score of A. Apart from a discounted PEG and P/E, HALO has an impressive long-term historical growth rate of 37.3%.
CACI International: Based in Reston, VA, CACI International provides IT, cybersecurity, intelligence and mission-support solutions to defense, intelligence, federal civilian and commercial customers. Its domestic operations span enterprise IT, data management, C4ISR, cybersecurity and systems engineering, while international operations serve government and commercial clients; fiscal 2026 revenues totaled $9.57 billion.
CACI can also be an impressive GARP investment pick with its Zacks Rank #2, a Value Score of B and a Growth Score of B. Apart from a discounted PEG and P/E, the stock also has a solid long-term expected growth rate of 10.6%.
View the Zacks #1 Rank List
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4 High-Growth GARP Stocks With Discounted PEG Ratios for 2026
Key Takeaways
In the equity market, 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 Brinker International (EAT - Free Report) , Dollar Tree (DLTR - Free Report) , Halozyme Therapeutics (HALO - Free Report) and CACI International (CACI - 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, the addition of 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.
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 purposes)
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 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.
Growth Score of less than or equal to B: Our research shows that stocks with a Growth Style Score of A or B, when combined with a Zacks Rank #1, 2 or 3, offer the best upside potential.
Our PEG-Driven Picks
Here are four stocks that qualified the screening:
Brinker: This company operates Chili’s Grill & Bar and Maggiano’s Little Italy, offering casual dining across U.S. and international markets. Chili’s focuses on burgers, fajitas, ribs and value offerings, while Maggiano’s serves Italian-American cuisine, including pasta, seafood and steaks, with banquet facilities at most locations.
EAT can be an impressive GARP investment pick with its Zacks Rank #2, a Value Score of B and a Growth Score of A. Apart from a discounted PEG and P/E, the stock has an impressive long-term expected growth rate of 14.6%.
Dollar Tree: Headquartered in Chesapeake, VA, Dollar Tree operates discount variety stores offering everyday consumables and discretionary merchandise across the United States and Canada. Its Dollar Tree banner features a growing multi-price format, while DollarTree.com provides bulk merchandise online and supports store traffic through promotions, events and seasonal offerings.
DLTR carries a Zacks Rank #2 at present, along with a Value Score of A and a Growth Score of A. Dollar Tree also has an impressive five-year expected growth rate of 13.6%.
Halozyme: San Diego, CA-based Halozyme develops and commercializes oncology treatments while licensing its ENHANZE drug-delivery technology for subcutaneous formulations. The company earns most revenues from royalties on partnered drugs. Royalties exceeded 55% of 2025 revenues. Total revenues reached $1.39 billion, up 38% year over year.
Halozyme stock can be an impressive GARP investment pick with its Zacks Rank #2, a Value Score of B and a Growth Score of A. Apart from a discounted PEG and P/E, HALO has an impressive long-term historical growth rate of 37.3%.
CACI International: Based in Reston, VA, CACI International provides IT, cybersecurity, intelligence and mission-support solutions to defense, intelligence, federal civilian and commercial customers. Its domestic operations span enterprise IT, data management, C4ISR, cybersecurity and systems engineering, while international operations serve government and commercial clients; fiscal 2026 revenues totaled $9.57 billion.
CACI can also be an impressive GARP investment pick with its Zacks Rank #2, a Value Score of B and a Growth Score of B. Apart from a discounted PEG and P/E, the stock also has a solid long-term expected growth rate of 10.6%.
You can see the complete list of today’s Zacks #1 Rank stocks here.