Even with Splunk Inc (NASDAQ:SPLK) trading down substantially from the recent market weakness, the stock is still very overvalued. The stock was one of the hottest IPOs in 2012 and recently hit all time highs while trading at ridiculously high multiples. Splunk Inc (NASDAQ:SPLK) is a leading provider of software for real-time operational intelligence. The company forecast up to 38% revenue growth for the year, but is that growth enough to justify outlandish multiples? Strong free cash flow The impressive part with most software companies is the ability to generate strong free cash flow even while reporting accounting losses. In this case, Splunk Inc (NASDAQ:SPLK) generated $18.6 million of free cash flow in Q1 2014 on total revenue of only $57.2 million. While the company is quick to caution that Q1 and Q4 see higher levels of free cash flow, it is impressive to flow nearly 33% of revenue during any quarter.