2 exciting small-cap ASX shares that could rocket in 2024

Analysts have put buy ratings on these small caps and see big potential returns.

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There's been a lot of talk recently from analysts and fund managers about the small side of the market.

They believe that small-cap ASX shares could rally in 2024 if interest rates start to fall.

With that in mind, let's now take a look at a couple of small caps that are currently rated as buys and could be good options for next year. They are as follows:

4DMedical Ltd (ASX: 4DX)

Bell Potter thinks that 4DMedical could be a small-cap ASX share to buy for 2024.

It is a global medical technology company that believes it has created a step change in the capacity to accurately and quickly understand the lung function of patients with respiratory diseases.

The broker likes the company due to its big opportunity in the United States. It highlights that with "3.5m veterans potentially eligible for screening to toxins from burn pit exposure, this opportunity continues to be the most lucrative." The recent signing of a memorandum of understanding with global giant Philips could accelerate adoption.

Bell Potter has a speculative buy rating and a $1.40 price target on its shares. This suggests that its shares could almost double in value.

Readytech Holdings Ltd (ASX: RDY)

Over at Goldman Sachs, its analysts see Readytech as a small-cap ASX share to buy for 2024.

It is a leading provider of mission-critical software-as-a-service (SaaS) solutions for the education, workforce management, government and justice sectors.

Goldman Sachs believes its shares are good value at current levels. The broker notes that "RDY remains undervalued compared to SaaS peers on an absolute and growth adjusted basis, trading on 11.5x FY24E EV/EBITDA vs a 19% FY23-26E EBITDA CAGR or a growth-adjusted multiple of 0.6x vs peers typically at ~1.5x."

Goldman has a buy rating and a $4.50 price target on its shares. This implies a potential upside of 30% from current levels.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and ReadyTech. The Motley Fool Australia has recommended ReadyTech. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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