Investors looking for hidden gems should keep an eye on small-cap stocks because they're frequently overlooked by Wall Street. Many opportunities exist in this part of the market, but it is also a high-risk, high-reward environment due to the lack of reliable analyst price targets.

These trade-offs can cause headaches for even the most seasoned professionals, which is why we started StockStory - to help you separate the good companies from the bad. Keeping that in mind, here are three small-cap stocks to pass on and some alternatives you should look into instead.

Nature's Sunshine (NATR)

Market Cap: $249 million

Started on a kitchen table in Utah, Nature's Sunshine (NASDAQ:NATR) manufactures and sells nutritional and personal care products.

Why Does NATR Give Us Pause?

1. Lackluster 4.4% annual revenue growth over the last three years indicates the company is losing ground to competitors

2. Revenue base of $492 million puts it at a disadvantage compared to larger competitors exhibiting economies of scale

3. Estimated sales growth of 2.8% for the next 12 months implies demand will slow from its three-year trend

Nature's Sunshine's stock price of $14.17 implies a valuation ratio of 13.2x forward P/E. Dive into our free research report to see why there are better opportunities than NATR .

Laureate Education (LAUR)

Market Cap: $5.17 billion

Founded in 1998 by Douglas L. Becker and based in Miami, Laureate Education (NASDAQ:LAUR) is a global network of higher education institutions.

Why Should You Sell LAUR?

1. Number of enrolled students has disappointed over the past two years, indicating weak demand for its offerings

2. Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 1.7 percentage points

3. Underwhelming 18.6% return on capital reflects management's difficulties in finding profitable growth opportunities

Laureate Education is trading at $37.53 per share, or 17.4x forward P/E. Read our free research report to see why you should think twice about including LAUR in your portfolio, it's free .

AerSale (ASLE)

Market Cap: $262 million

Providing a one-stop shop that integrates multiple services and product offerings, AerSale (NASDAQ:ASLE) delivers full-service support to mid-life commercial aircraft.

Why Do We Steer Clear of ASLE?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 7.5% annually over the last two years

2. Free cash flow margin dropped by 35 percentage points over the last five years, implying the company became more capital intensive as competition picked up

3. Eroding returns on capital from an already low base indicate that management's recent investments are destroying value