Orbital Sciences (NYSE:ORB) reported its second-quarter numbers on Tuesday and, well, the news wasn't great. But do you think the 12.6% sell-off might have been just a little overdone?

Investors seem to be coming around to this point of view. After crashing into the pavement Tuesday, this Motley Fool Rule Breakers recommendation has already rebounded more than 6%. Call it a reaction to an overreaction. Call it "shorts" closing out their winning bets. Me, I'm calling it a bottom -- and a chance to pick up these shares on the cheap. Here's why:

Bad news and worse news
The headline numbers sure looked bad enough. Second-quarter revenues dropped 10% from last year's total to $270.1 million, and earnings from continuing operations slipped similarly, down 12% to $0.15 per diluted share.

Bad as the revenue picture looked last quarter, it could get even uglier in quarters to come. New orders placed in the quarter failed to replenish revenues booked. Between "firm and option contract bookings" and "option exercises under existing contracts," Orbital inked deals for just $210 million in new business.

KEI = KIA
Worse still, business that Orbital thought it had, it no longer does. While most media have focused on the hatchet job that SecDef Gates' defense cuts have done on revenue streams at Lockheed Martin (NYSE:LMT), Boeing (NYSE:BA), and SAIC (NYSE:SAI), Orbital came away from the experience with its share of cuts and bruises as well. Cancellation of the Kinetic Energy Interceptor (KEI) program sliced $695 million from Orbital's total backlog, leaving it at $4.9 billion today.

(Nor was Orbital alone. Co-subcontractors Raytheon (NYSE:RTN) and Alliant Techsystems (NYSE:ATK), and lead contractor Northrop Grumman (NYSE:NOC), all took their lumps when KEI became KIA.)

And yet ...
OK, like I said, the news was bad. So why am I optimistic about this stock, and actually itching to buy more? For one thing, because even at today's levels, Orbital's total backlog amounts to some four years of work for the company.

For another: All this bad news has brought Orbital down to a very attractive price. Based on CEO David Thompson's latest estimate, we're probably looking at some $55 million in free cash flow generated this year. Assuming he's right, the stock now trades for a mere 10 times free cash flow to enterprise value. Most analysts think the company can grow its profits at nearly 15% per year over the next five years (and in fact, despite all the bad news, Orbital did grow its free cash flow 19% in the second quarter.)

Foolish takeaway
Call me crazy, Fools, but I think that's a bargain price. It's time to double down and shoot the moon on Orbital.

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Fool contributor Rich Smith owns shares of both Boeing and Orbital Sciences. Therefore, whether he's "itching to buy more" or not, The Motley Fool's disclosure policy requires that he not trade in either stock for at least 10 days after this article posts. Orbital Sciences is a Motley Fool Rule Breakers selection. SAIC is a Motley Fool Inside Value recommendation.