Investment Thesis
Dana Inc exhibits critical financial distress with negative operating cash flow of -$195M and free cash flow of -$257M despite reported positive earnings, indicating either significant one-time gains or underlying operational deterioration. Interest coverage of 0.9x signals inability to service debt from core operations, while declining revenue (-3% YoY) and 1% operating margin reflect structural weakness in the automotive parts business.
Strengths
- Cash position of $477M provides near-term liquidity buffer to manage operational challenges
- Moderate leverage at 0.63x debt-to-equity ratio limits financial distress risk compared to peers
- Current ratio of 1.57x indicates adequate short-term working capital management
Risks
- Interest coverage of 0.9x is critical distress signal - operating income cannot cover interest expense, creating immediate refinancing and covenant violation risk
- Negative operating cash flow of -$195M and FCF of -$257M are unsustainable; cash position will deplete within ~2 years at current burn rate
- Revenue declining 3% YoY with 1% operating margins indicates weak competitive position and pricing power in challenged automotive parts market; 58.2% net margin likely driven by non-operating gains masking core weakness
Key Metrics to Watch
- Operating cash flow trajectory - must return to positive to validate business viability
- Interest coverage ratio - requires improvement above 1.5x to eliminate refinancing risk
- Revenue trend and operating margin expansion - core profitability measures currently signaling operational distress
Financial Metrics
Revenue
1.9B
Net Income
1.1B
EPS (Diluted)
$9.89
Free Cash Flow
-257.0M
Total Assets
6.1B
Cash
477.0M
Profitability Ratios
Gross Margin
11.3%
Operating Margin
1.0%
Net Margin
58.2%
ROE
55.6%
ROA
17.9%
FCF Margin
-13.8%
Balance Sheet & Liquidity
Current Ratio
1.57x
Quick Ratio
1.09x
Debt/Equity
0.63x
Debt/Assets
66.9%
Interest Coverage
0.86x
Long-term Debt
1.2B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-16T06:25:47.090532 |
Data as of: 2026-03-31 |
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