We're an outside contender at the moment.
But there's also a decent chance that Babcock has intentionally not been maximizing his roster usage, in order to try and teach his young core some long term lessons at the expense of short term success. This encompasses all of a) tactics (i.e. an exaggerated emphasis on dump and chase hockey and forced abandonment of their elite rush game), b) roster usage (i.e. overusing worker bees like hyman, komo, polak and limiting the chances of the elite talent like Willy and Mitch), and c) roster selection (i.e. gritty vets like martin and polak over skilled rookies like Kapanen and Dermott).
If any of that is true, and not just wishful thinking, and Babcock starts shifting those factors more to short term success - and he's off to a good start with martin/polak in and kappy/dermott out, and komo on the 4th line) , IMO they'll look pretty close to a contender by the end of the season.