Divisadero Street Opens New $56 Million Stride Position: Is the Stock a Buy?

Divisadero Street Capital Management, LP disclosed a new position in Stride (NYSE:LRN), acquiring 375,000 shares valued at approximately $55.85 million, according to a Nov. 13, 2025, SEC filing.

What happened

According to a filing with the Securities and Exchange Commission dated Nov. 13, 2025, Divisadero Street Capital Management established a new equity stake in Stride during the third quarter.

The position totaled 375,000 shares, with a reported quarter-end value of $55.85 million, representing 2.44% of the fund’s $2.29 billion in reportable U.S. equity assets.

What else to know

The Stride position is a new addition, representing 2.44% of Divisadero Street Capital Management’s 13F assets as of the end of the third quarter.

Top holdings after the filing:

1. Dave Inc (NASDAQ:DAVE): $184.45 million (7.8% of AUM)
2. Turning Point Brands (NYSE:TPB): $136.01 million (5.7% of AUM)
3. Super Group (NYSE:SGHC): $129.79 million (5.5% of AUM)
4. Sezzle (NASDAQ:SEZL): $118.87 million (5.0% of AUM)
5. Indivior (NASDAQ:INDV): $81.07 million (3.4% of AUM)

As of Nov. 13, 2025, shares of Stride were priced at $64.98, down 35% over the prior year, underperforming the S&P 500 by 49 percentage points.

Stride reported a five-year revenue CAGR of 18.2%.

Company Overview

Company Snapshot

Stride:

• Offers technology-based education services, including proprietary and third-party online curriculum, software systems, and professional expertise for K-12 and adult learners.
• Generates revenue primarily through contracts with public and private schools, school districts, and direct-to-consumer offerings for virtual and blended education programs.
• Serves K-12 students, adult learners, employers, and government agencies in the United States and internationally.

Stride, Inc. is a leading provider of online education solutions, leveraging proprietary technology and curriculum to deliver individualized learning experiences at scale.

The company’s diversified business model spans K-12 virtual schools, career learning programs, and adult workforce development, positioning it to capture growth in both traditional and emerging education markets.

With a strong presence in the U.S. and a growing international footprint, Stride differentiates itself through its integrated platform and focus on adaptable, skills-based education.

Foolish take

Divisadero's Stride purchase last quarter is certainly notable for investors. The firm bought Stride at an average price of roughly $149, making the stock its 11th-largest holding in the process.

However, just a couple of months later, Stride reported earnings that sent its stock into a tailspin, with its share price cut in half overnight.

The culprit for this staggering drop was Stride's botched implementation of a significant platform upgrade for its customers, which ultimately resulted in the company losing between 10,000 and 15,000 new enrollments.

Compared to the company's total enrollment of roughly 250,000, this is a significant disappointment, and the market reacted accordingly.

The next few quarters may also be turbulent for Stride as it fixes and redeploys its system upgrade in an effort to retain its existing customers -- and hopefully add new ones further down the road.

That said, Stride actually beat analysts' expectations for the quarter, and the company remains the leader in its learn-from-home education niche.

Ultimately, I believe this sell-off presents an interesting opportunity for investors, and I have actually begun buying the stock while it trades at just 10 times earnings. I will be curious to watch Divisadero and other firms to see how they handle such a significant loss to their Stride holding and whether they double down or bail.

I wouldn't recommend going all in on Stride today, but it is certainly worth placing on a watch list, or maybe even buying in small increments over time.

Glossary

LP (Limited Partnership): An investment structure where general partners manage the fund and limited partners provide capital with limited liability.
Position: The amount of a particular security or asset held by an investor or fund.
AUM (Assets Under Management): The total market value of assets a fund or investment manager oversees on behalf of clients.
13F assets: U.S. equity securities that institutional investment managers must report quarterly to the SEC on Form 13F.
Quarter-end: The last day of a fiscal quarter, used as a reference point for financial reporting.
Trailing twelve months (TTM): The 12 months ending with the most recent quarterly report.
CAGR (Compound Annual Growth Rate): The annualized rate of return for an investment over a specified period, assuming profits are reinvested.
Equity stake: Ownership interest in a company, typically represented by shares of stock.
Proprietary technology: Technology owned and controlled by a company, often protected by patents or trade secrets.
Direct-to-consumer: A business model where products or services are sold directly to end users, bypassing intermediaries.
Blended education programs: Educational models combining online digital media with traditional classroom methods.
Workforce development: Programs or initiatives aimed at improving workers' skills and employability for current and future jobs.

Josh Kohn-Lindquist has positions in Stride. The Motley Fool has positions in and recommends Sezzle and Stride. The Motley Fool recommends Turning Point Brands. The Motley Fool has a disclosure policy.