Facebook Inc. (NASDAQ:$FB) requires no introduction. It is an online social network giant, perhaps unrivaled by competitors within the industry. Facebook’s stock price history over the past year indicates an increase of 36%, but this is overvalued.

Let’s take a look at the company’s latest balance sheets to reveal why:

• Total cash and cash equivalents of $35.452 billion
• $0 billion in total debt
• Total net cash position of $35.452 billion
• Subtracting the net cash total from its total market cap of $489.967 billion, we have an Enterprise Value of $454.515 billion
• $15.401 billion in operating earnings
• Facebook is trading on an acquirer’s multiple of 30, or 30 times operating earnings
• The average acquirer’s multiple is 7.4

Further, while taking a closer look at Facebook’s latest cash flow statements, it’s indicated that the company generated a two month operating cash flow of $19.384 billion with a %5.079 billion in Capex. This means that Facebook generated a $14.305 billion free cash flow, or a FCF/EV yield of a mere 3%.

There’s no doubt that Facebook is a top competitor in generating revenue with its current amount of $33.173 billion (ttm) and net income of $13.155 billion (ttm). But those impressive numbers should not trump a reasonable evaluation.

Featured Image: twitter