"Always leave them wanting more" might be good advice for musicians and actors, but it doesn't work so well in the markets. Small-cap medical-device maker Kensey Nash (NASDAQ:KNSY) left investors wanting more on Wednesday evening, and investors responded by marking down the stock 5.5% in trading yesterday.

Although reported earnings of $0.27 beat the average analyst estimate of $0.26, Kensey's forward guidance was below mean estimates for both the next quarter and the full year. If the company posts the revenue in March that it expects -- $16 million to $16.3 million -- that will be basically flat with the year-ago level. Given that growth investors tend to like growth, it's not surprising to see the stock get punished.

Kensey attributed the revision in part to delays in obtaining Food and Drug Administration approval for its new TriActiv device. This device helps to protect patients undergoing treatment of blocked saphenous vein grafts. TriActiv works to block the little pieces of debris that sometimes break free during the procedure and float into the heart or brain, potentially triggering a heart attack or stroke. With the saphenous-vein market worth approximately $150 million to $200 million annually, and with the possibility that the device could be approved for additional uses like the treatment of carotid or peripheral vascular disease, it's clear that approval of TriActiv is very important to the company.

TriActiv is important to Kensey also because it represents the first major product over which the company will retain sole control. To date, Kensey has operated its business by forming royalty agreements with larger companies, such as St. Jude Medical (NYSE:STJ) and Orthovita (NASDAQ:VITA), to distribute Kensey products. Not only does Kensey get a royalty on sales, but it also supplies materials to those partners -- hence, the company has two revenue line items: net sales and royalties. With TriActiv, though, Kensey will have everything to itself.

For growth stocks with high valuations, the story is always about the future -- in particular, future growth and earnings. Growth investors can be a finicky bunch, and with Nasdaq currently seeming to suffer from a bout of colic, any signs of slowing growth are quickly punished. What's more, even though medical-device makers almost always trade at high premiums to the broader market, Kensey isn't even a bargain by the inflated standards of its comparison group. While this small maker of devices for vascular care, sports medicine, and orthopedic surgery has the potential to do great things, current valuations suggest that the market already fully expects that.

Tom Gardner recommended Kensey Nash in the May 2003 issue of Motley Fool Stock Advisor . Since then, shares have risen 66.67% versus the S&P 500's gain of 35.55%. Learn more by subscribing today without risk for six months.

Fool contributor Stephen Simpson is a chartered financial analyst and has no ownership interest in any stocks mentioned.