GARP Strategy: How to Find Growth Stocks Without Overpaying
When you hear GARP strategy, GARP stands for Growth At a Reasonable Price—a method that blends growth investing with value investing to find stocks that are expanding but not overpriced. Also known as growth at a reasonable price, it’s the middle ground between chasing runaway tech stocks and sticking only to dull, low-growth bargains. This approach doesn’t ask you to pick the next big thing—it asks you to pick the next smart thing. You’re not betting on hype. You’re betting on companies that are growing their earnings steadily, and priced so you’re not paying a fortune for it.
The GARP strategy relies heavily on two numbers: the P/E ratio, the price-to-earnings ratio, which shows how much you’re paying for each dollar of a company’s earnings, and the PEG ratio, the price/earnings-to-growth ratio, which adds earnings growth into the equation to show if a stock’s price is justified by its future potential. A stock with a P/E of 20 might look expensive—until you learn it’s growing earnings at 20% a year. That’s a PEG of 1.0, which many GARP investors consider fair. Anything under 1.0? That’s a potential gem. Over 1.5? You’re probably paying too much.
This isn’t just theory. Peter Lynch, one of the most successful investors ever, used GARP principles long before the term was popular. He didn’t chase Silicon Valley startups—he looked at the stores people actually shopped at, the brands families trusted, and the companies quietly growing sales year after year. He called those tenbaggers—stocks that multiply tenfold—and he found them by checking if growth matched price. Today, you can do the same with data tools, but the logic hasn’t changed. GARP works best for long-term investors who want growth without the rollercoaster. It’s not for day traders. It’s for people who want to own businesses, not just trade tickers.
You’ll find GARP in action across many of the posts below. Some break down how to calculate PEG ratios step by step. Others compare real companies where P/E looked high—but PEG made the case for buying. You’ll see how robo-advisors and ETFs now include GARP-style screens, and how even fintech platforms use these metrics to filter investment options. There’s no magic formula here. Just clear math, patient research, and avoiding the trap of overpaying for growth that never materializes. What follows is a collection of guides that show you exactly how to spot these stocks, avoid the pitfalls, and build a portfolio that grows steadily—without the stress.
