Investing term
What is GARP — growth at a reasonable price?
A style that pays for growth, but not at any price — looks for moderate multiples on above-average growth.
GARP — growth at a reasonable price — is a middle-ground style that seeks companies growing faster than average but still trading at sensible valuations. It tries to avoid both overpriced hype stocks and cheap-but-stagnant ones, paying up for growth, but only so much. The PEG ratio is a common GARP tool, balancing a stock's P/E against its growth rate.
For example
A company growing earnings 20% a year at a P/E of 18 might appeal to a GARP investor — solid growth, without a sky-high price tag.
GARP — growth at a reasonable price is taught hands-on in Stage 15 — Valuation for Investors.
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