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. Fortinet FTNT, Tapestry TPR, Expedia Group EXPE 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). 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 18 that made it through the screening process.
Fortinet presents a compelling near-term opportunity grounded in strong fundamentals. After raising fiscal 2026 revenue guidance to reflect 15% year-over-year growth, the company projects full-year revenues of $7.71-$7.87 billion and billings of $8.8-$9.1 billion. The second-quarter 2026 billings guidance of $2.09-$2.19 billion signals sustained momentum. FortiOS 8.0 and proprietary FortiASIC technology sharpen platform differentiation and support market share gains.
The June 2026 launch of FortiSOC — a unified, agentic AI-powered SOC platform consolidating six security operations functions into a single SaaS experience — opens a meaningful new services revenue stream. July 2026 FortiEndpoint expansions further reinforce its AI-era security stack. With Unified SASE billings accelerating and an AI-intensified threat environment driving enterprise demand, Fortinet's integrated platform strategy supports a constructive near-term outlook.
The Zacks Consensus Estimate for FTNT’s 2026 earnings has moved 0.3% north to $3.15 per share in the past 60 days. This Zacks Rank #1 company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 17.46%.
Tapestry's raised fiscal 2026 guidance — revenues exceeding $7.75 billion and EPS of $6.40-$6.45, suggesting over 25% year-over-year upside — reflects management's confidence in sustained forward momentum. Operating margin expansion of approximately 180 basis points and adjusted free cash flow of $1.5 billion underscore disciplined execution across the portfolio.
The Coach brand, Tapestry's primary growth engine, continues to drive top-line strength, while Kate Spade's creative revival has gained fresh impetus with Jonathan Saunders' appointment as executive creative director in July 2026. Mira, Tapestry's proprietary AI platform, was awarded a U.S. patent in May 2026, enhancing assortment planning, inventory management, and consumer responsiveness and providing a durable structural competitive edge. Returning approximately $1.6 billion — nearly 100% of adjusted free cash flow — via buybacks reinforces the company’s near-term capital allocation discipline.
The consensus estimate for this Zacks Rank #2 company’s fiscal 2026 earnings has moved 1.3% north to $6.96 per share in the past 60 days. TPR’s earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 15.59%.
Expedia Group's near-term outlook rests on a compelling convergence of strategic initiatives and management-reaffirmed guidance. For 2026, the company guides revenues of $15.6-$16.0 billion (up 6-9%) and gross bookings of $127-$129 billion (up 6-8%), with adjusted EBITDA margin expansion of 100-125 basis points. Its B2B segment, growing at an accelerated pace, alongside the pending CarTrawler acquisition — expected to be closed in the second half of 2026 — meaningfully broadens ground mobility and insurance offerings.
A June 2026 leadership appointment to head global advertising signals intent to monetize its premier ad network more aggressively. The June 2026 expansion of Rapid API to cover flights, cars, and activities positions the platform as a full-trip solution. A new $5 billion share repurchase authorization further underscores management's confidence in sustainable cash generation.
The consensus mark for this Zacks Rank #2 company’s 2026 earnings has remained steady at $19.73 per share in the past 60 days. EXPE surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 13.92%.
Ralph Lauren is positioned for near-term upside, backed by its fiscal 2027 guidance. Management targets mid-single-digit constant currency revenue growth (~4-5%) and 40-60 basis points of adjusted operating margin expansion for the full year, with a stronger first half. The fiscal first-quarter guidance indicates mid-to-high single-digit revenue growth and 80-120 basis points of margin expansion. Key growth drivers include continued average unit retail elevation, 6.5 million newly recruited direct-to-consumer customers, and expanding city ecosystem investments.
High-potential categories — Women's Apparel, Outerwear, and Handbags — represent additional revenue levers. The board's 10% dividend increase, with $1.00 per share paid on July 10, 2026, underscores cash generation confidence. A $2.1 billion cash position and a $1.4 billion repurchase authorization reinforce the investment case.
The consensus estimate for this Zacks Rank #2 company’s fiscal 2027 earnings has increased by 0.5% to $18.33 per share in the past 60 days. RL’s earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 9.14%.
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Expedia Group, Inc. (EXPE): Free Stock Analysis Report
Ralph Lauren Corporation (RL): Free Stock Analysis Report
Fortinet, Inc. (FTNT): Free Stock Analysis Report
Tapestry, Inc. (TPR): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).