Position for Meta's Q1 2025 Report: Leveraged and Inverse ETF Trading Approaches

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Meta Platforms Inc.'s (META) Q1 2025 earnings report (April 30th after market close) arrives as the social media giant navigates substantial AI investments while growing its advertising business. Investors will focus on ad revenue growth, Reality Labs division results, platform user metrics, and ongoing AI integration. With Meta's stock recently declining along with other tech names, traders will watch for commentary on how proposed U.S. tariffs might affect revenue from Chinese advertisers.

Beyond these key areas, the market will assess Meta's standing in digital advertising against TikTok and newer platforms. The company's spending priorities, including share repurchases and R&D investment, will also receive close scrutiny.

As a $1.3 trillion market cap leader, META typically sees notable price swings following quarterly announcements. Traders anticipating these movements can use Direxion's Single Stock Daily Leveraged & Inverse ETFs as tactical instruments for short-term trading strategies.

Q1 2025 Earnings Outlook

Analysts forecast Meta to deliver earnings of $5.22 per share, a 10.8% increase from $4.71 in the year-ago period. The company comes into this report with momentum after beating earnings estimates in four consecutive quarters, including Q4's substantial 20.1% outperformance with $8.02 EPS.

Revenue is projected to hit $41.27 billion, up 13.2% year-over-year, primarily from the company's strong advertising operations. Analysts will track user statistics across Meta's app portfolio, which has maintained growth despite stiff competition in social media.

Recent Results and Stock Performance

Despite ongoing growth, Meta shares have fallen 1.7% over the past 52 weeks, trailing the S&P 500's 4.2% gain. The stock has faced pressure in recent trading sessions amid broader market concerns about potential tariffs affecting advertising spending from Chinese companies.

Meta's last quarterly report showed impressive execution, with Q4 2024 earnings of $8.02 per share beating estimates by 20.1%, driven by robust ad revenue and cost management. Looking ahead, analysts project 2025 EPS of $25.62, up 7.4% from 2024, with 2026 EPS forecasted to grow 12.6% to $28.84.

Wall Street's View

The investment community remains highly optimistic about Meta, with 46 of 54 analysts giving "Strong Buy" ratings, two recommending "Moderate Buy," four advising "Hold," and only two suggesting "Strong Sell." This favorable consensus suggests continued faith in Meta's advertising ecosystem and strategic direction.

The consensus price target of $744.68 indicates potential upside of 45.9% from current levels around $510. This projected growth highlights Wall Street's belief in Meta's value proposition despite recent stock weakness.

Trading Meta's Earnings With Leveraged ETFs

Meta's quarterly reports consistently trigger stock volatility, creating distinct trading opportunities for both bullish and bearish positions. Traders with directional views on META's upcoming results can use Direxion's ETF products to establish amplified long positions or inverse exposure to attempt to profit from possible disappointments without traditional margin accounts or short-selling requirements.

These specialized trading products offer active traders ways to execute precise strategies timed around high-impact events like earnings announcements.

Single Stock Daily Leveraged & Inverse ETF Options

Direxion's ETFs for Meta, launched in June 2024, provide tailored exposure for short-term traders seeking magnified or inverse performance relative to META's price action.

These products utilize derivatives to achieve specific daily targets, optimized for volatile periods such as earnings releases.

Bullish Strategy: METU

Direxion Daily META Bull 2X Shares (METU) allows traders to amplify their exposure to Meta’s daily stock movement. METU seeks 200%, before fees and expenses, of the daily performance of META through a portfolio constructed for amplified exposure.

• Aims for 200% of META's daily performance
  • A 1% rise in Meta stock targets a 2% gain for METU (before fees)
  • A 1% drop in Meta stock targets a 2% decline for METU (before fees)
• Suited for traders anticipating strong ad revenue numbers or positive forward guidance
• Trading activity intensifies during earnings periods
• Daily volume exceeds 628,000 shares
• Designed for active traders with regular position monitoring

Bearish Strategy: METD

Direxion Daily META Bear 1X Shares (METD) delivers inverse exposure, before fees and expenses, to Meta’s daily performance without short selling*. This feature makes METD especially useful for retirement account traders who cannot establish short positions in IRAs or 401(k)s.

• Provides inverse (-1x) daily performance relative to META
  • When Meta drops 1%, METD aims for a 1% gain (before fees)
  • When Meta rises 1%, METD aims for a 1% loss (before fees)
• Appropriate for traders expecting headwinds in ad markets or disappointing Reality Labs results
• Allows retirement account holders to make bearish trades within retirement accounts
• Daily trading volume exceeds 134,000 shares
• Serves as a way to hedge existing Meta positions

Both METU and METD reset their exposure daily and work as short-term trading vehicles rather than buy-and-hold investments. These instruments require active oversight and are created for traders who understand leverage effects and daily rebalancing operations.

*Short-selling is a trading strategy where investors borrow shares and sell them, hoping the stock price will fall.

Investing in the funds involves a high degree of risk. Unlike traditional ETFs, or even other leveraged and/or inverse ETFs, these leveraged and/or inverse single-stock ETFs track the price of a single stack rather than an index, eliminating the benefits of diversification. Leveraged and inverse ETFs pursue daily leveraged investment objectives, which means they are riskier than alternatives which do not use leverage. They seek daily goals and should not be expected to track the underlying stock's performance over periods /anger than one day. They are not suitable for all investors and should be utilized only by investors who understand leverage risk and who actively manage their investments. The Funds will lose money if the underlying stock's performance is flat, and it is possible that the Bull Fund will Jose money even if the underlying stock's performance increases. and the Bear Fund will lose money even if the underlying stock's performance decreases, over a period longer than a single day. Investing in the Funds is not equivalent to investing directly in META.

An investor should carefully consider a Fund’s investment objective, risks, charges, and expenses before investing. A Fund’s prospectus and summary prospectus contain this and other information about the Direxion Shares. To obtain a Fund’s prospectus and summary prospectus call 866-476-7523 or visit our website at direxion.com. A Fund’s prospectus and summary prospectus should be read carefully before investing.

Direxion Shares Risks – An investment in a Fund involves risk, including the possible loss of principal. Each Fund is non-diversified and includes risks associated with a Fund concentrating its investments in a particular security, industry, sector, or geographic region which can result in increased volatility. A Fund's investments in derivatives such as futures contracts and swaps may pose risks in addition to, and greater than, those associated with directly investing in securities or other investments, including imperfect correlations with underlying investments or the Fund's other portfolio holdings, higher price volatility and lack of availability. As a result, the value of an investment in a Fund may change quickly and without warning.

Leverage Risk – The Bull Fund obtains investment exposure in excess of its net assets by utilizing leverage and may lose more money in market conditions that are adverse to its investment objective than a fund that does not utilize leverage. A total loss may occur in a single day. Leverage will also have the effect of magnifying any differences in the Fund’s correlation with META and may increase the volatility of the Bull Fund.

Daily Correlation Risk - A number of factors may affect the Bull Fund’s ability to achieve a high degree of correlation with META and therefore achieve its daily leveraged investment objective. The Bull Fund’s exposure to META is impacted by META's movement. Because of this, it is unlikely that the Bull Fund will be perfectly exposed to META at the end of each day. The possibility of the Bull Fund being materially over- or under-exposed to META increases on days when META is volatile near the close of the trading day.

Daily Inverse Correlation Risk - A number of factors may affect the Bear Fund’s ability to achieve a high degree of inverse correlation with META and therefore achieve its daily inverse investment objective. The Bear Fund’s exposure to META is impacted by META’s movement. Because of this, it is unlikely that the Bear Fund will be perfectly exposed to META at the end of each day. The possibility of the Bear Fund being materially over- or under-exposed to META increases on days when META is volatile near the close of the trading day.

Meta Platforms, Inc. Investing Risk — Meta Platforms, Inc. is subject to a number of risks related to: its product offerings;  business operations and financial results; government regulation and enforcement; the ability to collect and use consumer data; data, security and intellectual property; among other risks. Information Technology Sector Risk — The value of stocks of information technology companies and companies that rely heavily on technology is particularly vulnerable to rapid changes in technology product cycles, rapid product obsolescence, government regulation, and competition, both domestically and internationally, including competition from competitors with lower production costs. Interactive Media & Services Industry Risk — The prices of technology and media companies, especially those of smaller, less-seasoned companies, tend to be more volatile and less liquid than the overall market. These companies are subject to rapid changes in technology and consumer platform preference, including the increased use of mobile-based apps, competition for advertising revenue, changes in audience preferences, evolving industry standards and frequent new product productions.

Additional risks of each Fund include Effects of Compounding and Market Volatility Risk, Derivatives Risk, Counterparty Risk, Rebalancing Risk, Intra-Day Investment Risk, Concentration Risk, Market Risk, Non-Affiliation Risk, Security Volatility Risk and Cash Transaction Risk. Additionally, for the Direxion Daily META Bear 1X Shares, Shorting or Inverse Risk.  Please see the summary and full prospectuses for a more complete description of these and other risks of a Fund.

ALPS Distributors, Inc.

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