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The media continues to focus on what Facebook (NASDAQ:FB) is doing to monetize traffic, yet very little is focused on the traffic trends itself. The company has famously focused on the positive year over year trends, yet the sequential monthly figures tell a far different story.

The leading Internet social media firm has surged to a market cap approaching $65B based on a whole slew of traffic monetization plans from mobile to graph search to gifts. While nobody disputes Facebook as the leading social networking platform, a big difference exists in whether the company is a required network for interacting or a social network soon to be replaced by newer platforms just as it replaced MySpace.

Domestic Active Users Peaking Is A Big Issue

The bigger issue mostly not reported by the media is that since October the company has seen virtually flat growth in the US according to SocialBakers. Upon further research, the traffic data is rather negative over the last 3 months. The traffic surge during the holidays has fallen off and is actually down 2% in the US.

Even more interesting is the lack of growth in most of the top 10 countries. Only Brazil is seeing decent growth approaching 6%. India only has 5% penetration, yet the active users have been flat in the last three months. See list below:

Table - Top 10 Countries (3 Month Growth)

(click to enlarge)

Going further down the list and Japan has seen a 21% drop over the last three months though it only has a 10% penetration rate. Even more concerning should be that the six month growth trends are mostly flat. Sure Brazil and India hit 10% growth, but all the major countries such as the US, UK, France and Germany have all virtually maxed out.

Revenue Per User

Outside of the active users peaking in the developed world, the company has a huge issue monetizing the growth in the emerging markets. Brazil and India might still be growing, but the revenue per user doesn't provide material revenue. As the slide from the Q4 2012 presentation shows, the average North American user is worth $13.58 per year while the users in Asia and Rest of World are worth only $2.

Table - ARPU

(click to enlarge)

This discrepancy in user revenue heightens a need to focus on domestic users. Even European users only garnered $6 last year.

Stock Performance

The stock performance since the day after the IPO has remarkably hit the flat line with major resistance at the $32.50 level. The stock even appears to have hit a double top in January suggesting that investors might be catching onto the troubling user trends.

1-Year Chart - Facebook

(click to enlarge)

Conclusion

Even with a flat lining user base amongst the developed and highly valuable user base, the company should be able to reap higher monetization values from existing users. The ARPU in Europe will need to double to match the domestic valuations. The Rest of World figures will continue to soar along with traffic, yet if domestic active users drop the company will struggle to maintain revenue momentum. After all, it will take 7 users in Brazil or India to match the value obtained from 1 domestic user.

Facebook will continue growing, but it will struggle to meet the targets as the active user base starts peaking. The stock might have already peaked.

Source: Numbers Cannot Lie About Facebook

Additional disclosure: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion or consult a financial advisor. Investing includes risks, including loss of principal.