Project Ara boosts 3D Systems
Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) wants you to take pre-built components and manufacture your own smartphone. The company wants developers to take accepted electronics and design their own forms to house them. Developers will need to move into 3D printing in order to do this, and the Project Ara Module Developer Kit (MDK).
3D Systems Corporation (NYSE:DDD) should see more people use its 3Dprinters on the back of the partnership with Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL), and the use of 3D printing as a whole should increase on the back of the project according to the analysts. The project will “drive dramatic print speed improvements to rival traditional manufacturing” according to 3D Systems.
3D Systems stock continues slump
Shares in 3D Systems Corporation (NYSE:DDD) have lost almost half of their value so far in 2014. The company was hit hard by the momentum bust that swept the market, and it has failed to recover in any significant sense. Canaccord reckons that the company’ multiple may begin inflating once again because of the positives offered by the modular smartphone project from Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL), but there are risks in the industry, most notably competition.
Very few analysts are taking Project Ara seriously as a challenge to the smartphone industry. As with PC customization, the belief is that only a minority of tech-savvy want to customize their phones. Most people simply want a smartphone that works, and one that was designed with some kind of uniformity in mind. Project Ara might be a boost to 3D Systems Corporation (NYSE:DDD), but it is unlikely to push the company into massive growth.
With the company’s stock already trading at more than 100 times earnings, 3D Systems Corporation (NYSE:DDD) is already priced to grow significantly. For a company in a highly competitive and unproven industry twice that number seems a little high and that idea appeared to strike many of the company’s investors early on in 2014.