As we head into 2024, it’s common for investors to look back on 2023. Much of this year had investors in a defensive posture. Small-cap stocks lagged sharply behind the broader market. However, the market rally that started in November is showing signs of broadening to include small-cap stocks.  

But which ones are ready to shine in 2024? One place for you to start your research is in the stocks that are receiving upgrades from analysts. The market is forward-looking, and analysts are a significant reason for that. Their job is to render an opinion on individual stocks and sectors. Frequently, this can help you understand where the market is moving.  

In 2024, analysts are getting more bullish on small-cap stocks, and here are seven for you to watch closely as you make your plan for 2024. 

Structure Therapeutics (GPCR) 

Biotech investors know that many moonshot opportunities are found among small-cap stocks. One of those options that analysts love is Structure Therapeutics (NASDAQ:GPCR). The small-cap company went public in February 2023, but already has attracted a Strong Buy rating from several analysts.  

This is a clinical-stage company, which means it has drug candidates in clinical trials, but nothing that is commercially available.  

Structure’s lead candidate, GSBR-1290, is an oral GLP-1 receptor agonist to treat type-2 diabetes and obesity. The link between obesity and type-2 diabetes is well-known. According to Structure, 90% of Type-2 diabetes patients are classified as overweight or obese. And cases of type-2 diabetes are projected to grow 46% by 2045. 

The company expects clinical study data for diabetes in December and it expects results for obesity in January. Analysts are expecting positive results with a price target of $82.67 which is a gain of 155.8% from the current GPCR stock price.  

ALX Oncology (ALXO) 

Another clinical-stage biotech company on this list of small-cap stocks is ALX Oncology (NASDAQ:ALXO). The company is developing a “next-generation checkpoint inhibitor” that is designed to block the “don’t eat me” signal given off by CD47, a specific a cancer cell protein.  

ALX is currently collaborating with Merck & Co. (NYSE:MRK) and Eli Lilly (NYSE:LLY) to bring a total of three drugs through clinical trials. All three candidates received fast-track designation from the U.S. Food & Drug Administration (FDA) with final results of Phase 2 trials expected in the first half of 2024.  

ALX Oncology is relatively new to the public markets. It only began trading publicly in 2020. Like many stocks that went public in that time, the stock surged in 2021, but is trading significantly below its IPO price today.  

ALXO stock has received six analyst upgrades in the last three months that correlates with a 159% increase in the company’s stock price.  

Skyward Specialty Insurance Group (SKWD) 

Skyward Specialty Insurance Group (NASDAQ:SKWD) is another stock with six upgrades in the last 90 days. The company helps address an unmet need for property and casualty insurance, particularly in underserved markets. And the company also uses artificial intelligence (AI) to customize solutions that help select and price risk to help its clients achieve optimal outcomes.

SKWD stock began trading publicly on January 12 at $15. It’s been a great year for the stock which is trading at $33.50 at the time of this writing which is pushing the stock near the price target set by analysts.  

That suggests the stock is due for a correction. However, in the three months ending September 30, the company generated revenue of $639.67 million. That’s a 40% increase over the same three months in 2022. Revenue growth like that supports the opinion that Skyward will achieve 17% earnings growth in the next 12 months. And the $36.57 price target suggests 9% growth from the stock’s current level.  

LifeMD (LFMD) 

LifeMD (NASDAQ:LFMD) is a telehealth company that has received three analyst upgrades in the last three months. LFMD stock is up 310% in 2023 and with these upgrades, it may have higher to go.  

After 2020, the assumption was that we would all be doing virtual doctor visits as much as possible. The idea was that once “consumers” got used to having non-life-threatening health problems dealt with virtually, a new “normal’ would emerge. But when “consumers” are “patients” that dynamic changes.

Still, just because it hasn’t caught on yet, doesn’t mean it doesn’t have support. In the last year, LifeMD has reported year-over-year increases in revenue. The issue, for now, is a lack of profitability. That’s not supposed to change anytime soon, but that doesn’t seem to bother analysts. 

Two other bullish indicators for LifeMD are a sharp decline in short interest in the last month as well as interest from institutional investors in the last quarter.  

VSE Corporation (VSEC)

VSE Corporation (NASDAQ:VSEC) is a diversified aftermarket services and distribution company. It’s received three upgrades from analysts in the last 90 days. The company has streamlined its operations into two business units: aviation and fleet. That makes it pretty easy to see why VSEC stock is up 36% in 2023. 

Air travel remains strong and is expected to continue its current trend in 2024. The company’s fleet division is anchored by its relationship with the United States Postal Services (USPS).  

Over the past two years, VSE has been growing revenue at a compound annual growth rate (CAGR) of 36%. It’s also been growing EBITDA by a CAGR of 57%.  

VSEC stock merits five out of five Strong Buy ratings from analysts. It also has a consensus price target of $78 which is 21% higher than the stock’s current price.  

Asino Silver & Gold Mines (ASM) 

Mining stocks are tricky investments any time. But there are moments when they make sense for investors. In the last three months, four analysts have upgraded Asino Silver & Gold Mines (NYSE:ASM). There’s an explanation that doesn’t require you to be a gold (or silver) bug.  

Do a little thought exercise with me. The narrative for much of 2023 is that inflation is shrinking. But if you gain five pounds one month and just three pounds the next, you’ve still gained eight pounds. Do you see what I mean?  

Inflation is not going down, but the rate of inflation is decreasing. One reason for this is that government spending is not going down. The last jobs report showed that 25% of all jobs created were federal government jobs. And that’s not likely to go down in an election year. Another reason to be bullish about precious metals is that central banks around the world are loading up on their physical gold purchases.  

But is ASM stock worth a bet? Analysts seem to think so. This is literally a penny stock, but analysts are forecasting stock price growth of over 263% in the next year.  

PetIQ (PETQ)

PetIQ (NASDAQ:PETQ) is the stock with the fewest number of analyst upgrades. Only one analyst has upgraded PETQ stock in the last three months. However, the number of analysts has nearly doubled in that time, and all of them are bullish on the stock. 

It’s not hard to see why. Pet health and wellness is big business. PetIQ’s business model is a vertical integration of “pet product manafacturing, distribution and veterinary services segments.” The company’s goal is to educate pet owners on the importance of preventative veterinary care while making it easy for them to access the products and services their pets need.  

The company’s revenue and earnings have been up-and-down in the last year when compared to 2022. And analysts are forecasting flat earnings for the next 12 months. But that isn’t stopping analysts from suggesting that PETQ stock will climb over 40% in the next 12 months.  

On the date of publication, Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.