Some stocks offer what appears to be truly unlimited potential. But it is important to remember one factor to successful investing is price. Organovo (NASDAQ:ONVO) is a perfect example.

Two weeks ago, Organovo presented data at a conference that showed retention of key liver functions in bioprinted tissues for up to 40 days. This represents a great leap for Organovo, and its share price soared as much as 30%. After a quick 20% drop, the share price has been on the rise again. 

Investors are hoping \that this new development will lead to near-term revenues from producing liver toxicology assays, which can be used by pharma companies for drug testing. Organovo still hopes to begin delivering these assays by December 2014.

But so far the company has not released any projections on individual pricing, achievable volumes, or overall revenue potential. Investors have simply been bidding up the stock on the basis that good news should make the price go up instead of down.

The purchase of any stock can carry substantial risk. But the risk of buying a pre-revenue stock such as Organovo after the stock has quadrupled is considerable.

During the course of 2013, we have seen repeated price spikes in Organovo based on new developments. But because none of these have changed the underlying financial picture or Organovo, the gains have reversed themselves within a few weeks on each occasion. 

Exciting developments in July sent the stock soaring to $8.50. But within weeks the stock fell back to $4.60 -- a quick decline of nearly 50%. 

The same wisdom can be applied to much larger stocks as well. When Apple (NASDAQ:AAPL) briefly exceeded $700, it was still a great company and was still delivering products that would revolutionize consumer electronics. But by early 2013, the stock had fallen by 45% from those peaks -- even though it was still a great company. 

In the 3-D printing space, ExOne (NASDAQ:XONE) recently traded as high as $78, valuing the company at more than $1 billion. But since that time, the shares have fallen by 36% as investors come to terms with the fact that the company still loses money and only generates $9 million per quarter in revenue at the moment.

The biggest lesson here is that investors need to be careful with stocks that have a significant amount of growth already baked into their price. For both Apple and ExOne, the reason that the share price dropped was that perfection had been factored into the share price. In both cases, the companies actually delivered very reasonable results just at the time that their share prices dropped. This was because the share prices had simply run too far ahead of any realistic financial results. 

Looking at Organovo, investors need to decide if the company currently has the prospects to merit a market cap of more than $600 million, even with no material revenue prospects for at least another year. 

In its most recent quarter, Organovo pulled in a mere $110,000 and delivered a net loss of nearly $4 million. 

The biggest concern with Organovo is that it has not yet given investors any idea of the type of volume it will be able to produce in December 2014. If it is still on the small lab scale, then revenues will begin at a very tiny level and start to build up once the company gains commercial scale. This is quite typical of many start up biotech companies. Yet with a valuation of more than $600 million, investors seem to expect that the company will immediately turn on the spigot to many millions in revenue as early as December 2014.

Rather than being terrified of missing the upside ride at such an early date, investors should be patient. With no near-term revenue prospects, there is a strong chance that investors will have more than a few opportunities to buy shares at $6 once again. Even at $6, Organovo will have been a stellar performer versus the $2 price where it was a year ago.

Fool contributor Mark Duvall has no position in any stocks mentioned. The Motley Fool recommends Apple and ExOne. The Motley Fool owns shares of Apple and ExOne. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.