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The stealth system in 7 days to die is based off of several factors: Light levels in the area, noise generated by the character, settings that you may have changed in the game, and certain other environmental characteristics. Stealth is a separate option to the standard Run & Gun Strategy, and can pay off in different ways. You can activate stealth by crouching (default c key). Stealth allows you to get a 2x damage multiplier on your first hit against an enemy and even have a chance to one hit an enemy depending on the damage of the weapon that you are using.
There are 3 perks (under the agility attribute) that influence your stealth ability: Ninja Movement, Hidden Strike, and From The Shadows.
Ninja Movement increases sneak movement speed up to 30%.
From The Shadows allows you to more effectively hide in the shadows, and muffles noises from actions.
Hidden Strike increases the first hit damage multiplier up to 4x.