4 GARP Stocks That Investors Can Scoop Up for Maximum Returns

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. Lam Research LRCX, The Cheesecake Factory CAKE, Vertiv VRT and Fortinet FTNT 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 nine that made it through the screening process. Each of the selected stocks given below sports a Zacks Rank #1.

AI-driven semiconductor demand is fundamentally reshaping Lam Research's business outlook. The company's September 2026 quarter guidance targets revenues of $8.1 billion — a sharp sequential step-up — with non-GAAP operating margin guided at 39.5%, signaling ongoing cost discipline and pricing power. Customer support-related revenues, a recurring and margin-accretive stream, are expanding alongside systems revenues, reinforcing the durability of Lam's installed base monetization.

Deferred revenues reached $2.43 billion as of June 2026, providing meaningful near-term revenue visibility, while a growing Japan shipment backlog added $490.2 million in secured future revenues. A strong cash balance of $5.6 billion preserves capital return optionality. Management has guided toward a third consecutive year of outperformance in 2026, reflecting sustained competitive positioning as semiconductor manufacturing complexity deepens.

The Zacks Consensus Estimate for LRCX’s fiscal 2027 earnings has moved north by 17.6% to $9.24 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in all four trailing quarters, the average surprise being 7.12%.

The Cheesecake Factory entered the second half of 2026 on firm fundamental ground. Menu innovation, a growing digital rewards program and targeted marketing are strengthening consumer engagement across 375 company-operated restaurants. The company reiterated its guidance to open as many as 26 new restaurants in fiscal 2026, expanding its platform through North Italia, Flower Child, and FRC concepts.

In second-quarter 2026, CAKE repaid $69 million in convertible notes, reducing total debt to $575 million due 2030. The available liquidity of $561.7 million as of June 30 supports growth. Operators delivered year-over-year labor productivity and food efficiency gains, underpinning margin improvement. A quarterly dividend of $0.30 per share, to be paid out on Aug. 25, 2026, alongside share repurchases, reflects confidence in sustained cash generation.

The Zacks Consensus Estimate for CAKE’s 2026 earnings has moved north by 10.5% to $4.43 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 10.1%.

Vertiv stands as a pivotal AI infrastructure enabler, with mid-2026 capacity additions and raised guidance underpinning a constructive near-term case. On July 1, the company opened a manufacturing facility in Johor, Malaysia, deepening its Asia-Pacific supply network for AI and high-density computing. On July 21, investments at its Tognana, Italy campus targeted doubling chiller production capacity by year-end 2026, with a new testing laboratory planned for early 2027. Its raised full-year 2026 guidance calls for ~$14 billion in net sales and adjusted EPS of $6.65–$6.75.

Deferred revenues nearly doubled to $3.6 billion by June 2026, signaling strong backlog momentum. With $5.6 billion in liquidity, a strong net cash position, and third-quarter organic growth guided in the range of 34–36%, Vertiv's fundamentals remain compelling.

The consensus estimate for VRT’s 2026 earnings has moved north by 3.6% to $6.64 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 12.61%.

Fortinet's investment case is underpinned by accelerating product momentum, strategic innovation, and raised guidance. Its converged SASE Firewall architecture — integrating firewall, SD-WAN and SASE on a single FortiOS platform powered by proprietary FortiASIC — continues to deepen enterprise adoption. In July 2026, Fortinet launched the FortiGate 1200G series with FortiSASE Outpost, advancing firewall-SASE convergence, while introducing FortiSOC, a cloud-delivered AI platform unifying six core SOC functions. 

FortiEndpoint received new AI-era capabilities, and a strategic Intel collaboration to co-develop Security Processor 6 strengthens Fortinet's silicon differentiation. Moody's upgraded its credit rating to A3 — the highest among public cybersecurity companies. Management raised full-year 2026 revenue guidance to 19% growth, targeting $8.02–$8.18 billion, with third-quarter billings guidance of $2.25–$2.35 billion providing strong near-term visibility.

The consensus estimate for FTNT’s 2026 earnings has moved north by 8.3% to $3.4 per share in the past 30 days. The company surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 20.34%.

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