Vectrus, Inc.
Thesis
Vectrus is a defense contractor with sticky government contracts and a potential for margin expansion due to a fixed price structure on renewals. The company has a medium-term earnings power of $3 per share, and applying a 13x multiple gives a target valuation of close to $40 per share, while currently priced at $25.
Did it work?
The long thesis called for roughly 60% upside to ~$40 based on sticky government contracts and margin expansion, but the stock instead collapsed 82.4% (implying a price near $4.40 from the ~$25 pitch level). A decline of that magnitude decisively invalidates the thesis — the assumed earnings power and multiple expansion clearly did not materialize, and the stock would need to rise more than 5x just to reclaim the entry price. Regardless of the unknown time elapsed, this is an unambiguous failure.