What happened

Shares of Roku (ROKU -3.09%) fell 23.7% in March 2018, according to data from S&P Global Market Intelligence. This plunge played out in spite of several bullish analyst notes and a couple of brand-new partnerships that may prove to be important in the long run.

So what

February ended on a sour note with a disappointing fourth-quarter report, and March didn't bring any relief. Analysts started to notice the streaming media player vendor's increasingly attractive share prices, issuing upgrades and price target increases by the bucketload.

"Buy the sell-off," said Needham in late February. A couple of weeks later, Oppenheimer removed Roku from its "sell" list, citing a stronger risk/reward profile. Citi soon followed suit, but it didn't matter much -- none of these optimistic analyst actions could stop an inexorable slide in Roku's share prices.

A young couple huddles up with a bucket of popcorn on their couch while watching a movie, with the woman half-covering her eyes with her hands

Image source: Getty Images.

Now what

If the ineffectual analyst notes weren't enough, Roku also took some important steps toward larger revenue streams and higher profitability in March. First, Samsung (NASDAQOTH: SSNLF) agreed to put the Roku Channel media app on some of its smart TV sets this summer. Fellow Fool Rich Duprey noted that Roku wants to become a media services business and rely less on low-margin hardware sales, and partnerships like the Samsung deal will serve that ambition to a T.

A similar agreement with Sanyo soon followed, and we can only assume that Roku is working on many more of these app placements on popular brands of smart TV sets. These agreements are fundamentally different from Roku's existing selection of TV partners that run their entire digital media experience on a Roku-designed operating system. Simply installing one more media app at the factory is a much smaller and easier commitment, opening up Roku's partnership strategy to a much larger market.

Roku shares are trading some 43% below the highs that were set in December. I like the idea of selling fewer set-top boxes in exchange for more streaming media apps and TV partnerships, and I'm scratching my head over the market's brutal takedown of this stock in March. I'm not saying that the only way from here is up, but there's definitely more upside than downside to owning Roku stock at these prices.