Is DAN Stock Worth Buying Now After Having Surged 23% YTD?

Core Viewpoint - Dana Incorporated is focusing on streamlining operations and enhancing efficiency, which has positively impacted investor confidence and led to a 23% increase in share price year-to-date, outperforming its industry and competitors [1][4]. Financial Performance - In 2024, Dana reported sales of $10.3 billion, a decrease of 2.8$885 million, with EBITDA margins improving by 60 basis points to 8.6% [6]. - The company achieved a free cash flow (FCF) of $70 million, a significant turnaround from a$25 million outflow in 2023 [6]. Sales Backlog and Earnings Estimates - Dana has a three-year net new sales backlog of $650 million, with expectations of$150 million in 2025, $300 million in 2026, and$200 million in 2027 [7]. - The Zacks Consensus Estimate for Dana's 2025 and 2026 EPS indicates year-over-year growth of 70% and 31%, respectively, with upward revisions noted [17]. Strategic Initiatives - Dana is implementing a cost-reduction plan targeting $300 million in savings by 2026, which includes reducing complexity and overhead costs [10]. - The company plans to sell its Off-Highway business, which generated$2.76 billion in sales in 2024, to focus on light and commercial vehicles [11]. - Dana will restructure into two core segments: Light Vehicle Systems and Commercial Vehicle Systems, integrating the Power Technologies business to enhance efficiency [12]. 2025 Outlook - For 2025, Dana anticipates revenues of $9.77 billion, reflecting a 5$975 million, an increase of $90 million from 2024, with FCF expected to rise to$225 million [16]. Valuation and Market Position - Dana trades at 0.21X forward sales, which is lower than some peers, indicating a relatively better valuation [19]. - The company has a long-term debt-to-capital ratio of 65%, higher than the industry average of 21%, but is taking steps to improve financial health through cost-cutting and portfolio optimization [21].