The correction has been brutal for Roku (ROKU 1.88%) investors. Last year's best-performing large cap, more than quadrupling in 2019, has plummeted 42% since last summer's all-time high. The stock briefly cracked below $100 on Friday, trading in the double digits for the first time in more than five months.

On the other hand, Roku is still a game changer for long-term shareholders. The stock has more than tripled since the start of last year. So let's go over a few of the reasons the recent lull is a buying opportunity. 

A smart TV running Roku's operating system features a home screen with ads.

Image source: Roku.

1. The trends are still kind

Let's rattle off the three metrics that continue to make Roku the smartest way to play the streaming video revolution. 

  • There are 36.9 million active accounts, a 36% increase over the past year.
  • The 11.7 billion hours of content streamed through Roku in the fourth quarter is 60% higher than it was a year earlier.
  • Growing usage per account and stronger monetization finds average revenue per user climbing 29% to $23.14 over the trailing 12 months. 

This trend isn't going to reverse anytime soon. We're spending more time consuming video on demand, and Roku is the one company that stands to win no matter which of the growing number of services comes out on top.

2. Coronavirus isn't a threat to Roku

Size up your portfolio, and most of your stocks are probably going to take a financial hit as a result of the growing spread of the novel coronavirus. Less money will be spent in general until the world is comfortable that the deadly virus is under control. 

Roku is one of the few companies with an inside track to keep thriving in this climate. Folks will be spending more time at home, and with the large number of services hungry for audiences, they'll be sending Roku more money to stand out. 

3. Shorts have never been higher

There were 12.8 million shares of Roku sold short as of mid-February, the highest-ever number of wagers betting against the stock. The growing number of naysayers may seem problematic at first, but the pessimism also opens the door for a potential short squeeze. 

Usage is only increasing, so the thesis that rival hubs will overtake Roku isn't playing out in the near term. Concerns that the stock is overvalued are suddenly not as obvious, now that it's surrendered more than 40% of its peak value. Encouraging news will send the stock higher as shorts scurry for the exits, and it's probably more of a matter of when, not if, the short squeeze will happen. 

4. Original content can be a game changer

Roku has no immediate plans to begin rolling out original shows and movies, but it is apparently in the exploratory stages of the practice. Roku is generating enough revenue where it can afford to cut checks for content that will make its platform stand out. The counterargument is that the thousands of services available on Roku -- and fueling its business -- may start seeing Roku as a competitor instead of a service-agnostic ally.

The good news for investors is that Roku has already set up camp as an audience stealer, and it's not dimming its appeal as a lead generator for the industry. The Roku Channel launched in late 2017 as a free ad-supported channel. Last year it started selling access to third-party platforms through a subscription marketplace. Roku's business model has evolved, and its dominant position as an industry tastemaker is there for the monetization. When original content becomes a new weapon in its growing arsenal, it's going to be a good thing for Roku.

Roku has gone from being one of last year's top stocks to a major laggard in 2020. The fundamentals are still strong, and eventually the bulls will have the next laugh.