The past five days have been rough for investors in Oshkosh (OSK - Get Report) .

On September 23 the stock plunged by about 10% after issuing disappointing guidance. There had been a lot of hope riding on the truck maker, which has risen 34% so far in 2016 following news of a hefty Pentagon contract.

But since the guidance update, Oshkosh investors have lost more money in the stock compared to peers invested in Navistar Intland Spartan Motors.

Is this company running itself into the ground? Absolutely not. In fact, this decline is giving us a perfect opportunity to profit.

Oshkosh has become a leading seller of specialty access equipment as well as commercial, fire and emergency, and military vehicles. It owns a bevy of brands (some acquired) including Oshkosh, JLG, Pierce, McNeilus, Jerr-Dan, Oshkosh Specialty Vehicles, and Frontline.

With little direct competition, Oshkosh tripled annual sales between 2006 and 2010. And a government order for its M-ATV contributed nearly half of OSK's sales for 2010.

However, sales started sliding after that record year. Net profits, once above $1 billion (2009 fiscal year), fell to less than $250 million in 2015.

In August 2015, Oshkosh staged a major coup when it edged out Humvee originator AM General and Lockheed Martin in a team with BAE Systems to bag a $6.75 billion order to start production of a replacement for the aging Humvee tactical vehicles. The contract covers 17,000 Joint Light Tactical Vehicles (JLTVs) for the Army and the Marine Corps.

Against the backdrop of the huge multibillion deal, the recent guidance by Oshkosh came as a big disappointment. The company's initial estimates for fiscal 2017 include revenues of $6.5 billion to $6.7 billion, operating income of $390 million to $430 million, and earnings-per-share (EPS) of $3.00 to $3.40. The EPS prediction was way below Wall Street expectations (with a consensus guidance of $3.61). This led to the shares sell-off.

But the tide is about to turn.

Just days ago, Deutsche Bank started coverage on the stock with a "Buy" rating. While some competitors in the industry such as Federal Signal sport better earnings growth potential of 15% per year for next five years, compared to Oshkosh's 9.5% run rate (according to analysts), Oshkosh is more attractive than the likes of Terex (just 2.1% EPS projected growth rate per year).

And other analysts have become more bullish about the stock after the recent downturn. Oshkosh has been upgraded to "Neutral" with a $54 price target from "Underperform" at Credit Suisse. The bank has categorically said it believes Friday's sell-off was overdone.

The sharp reaction to Oshkosh's disappointing forecast was simply an overreaction. And in turn, Wall Street is giving us a great discount opportunity for a smart investment return.

Oshkosh's Humvee deal will go a long way toward solidifying the company's pedigree when it comes to defense deals.

And the "margin mix benefit" for Oshkosh from the deal could be substantial. For the past 18-to-20 months, Oshkosh has enjoyed an operating margin of 5%-to-7%. While this is better than those of Navistar and Spartan, Oshkosh could witness significant re-rating if margins claw their way back to 10% levels (as in 2006, 2007, etc.).

The 12-month median price target for Oshkosh's stock indicates a near 15% moneymaking opportunity. This makes this week's price plunge look like a chance to get into this stock at a great bargain.


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The author is an independent contributor who at the time of publication owned none of the stocks mentioned.