The ResMed Inc. (ASX: RMD) share price is trading around $31.89 on Friday.
For a global healthcare business with a long runway still ahead, I think that price is becoming difficult to overlook.
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A huge amount of the market remains untreated
ResMed is already one of the world's leading providers of sleep apnoea treatment, but the potential market is far from mature.
The company estimates that more than one billion people globally have sleep apnoea. Yet fewer than 20% of patients in the US are diagnosed or treated, with penetration below 10% across the rest of the world.
That puts the growth opportunity into perspective. ResMed does not need to discover an entirely new market. There is already an enormous population that could benefit from treatment but has yet to receive it.
The company also expects the number of US adults with obstructive sleep apnoea to reach around 77 million by 2050.
I think improving awareness, diagnosis, and access to treatment could keep bringing new patients into the market for many years.
More patients can mean years of spending
ResMed's opportunity does not finish when somebody receives their first machine.
Treatment generally involves masks and other products that need replacing over time, giving the company an ongoing relationship with patients.
ResMed says the global device market is growing at a mid-single-digit rate, while the market for masks is growing at a high-single-digit rate.
I like that combination. The company can benefit from more people beginning treatment while continuing to serve the large group already using its products.
ResMed is also expanding more broadly into sleep health, including areas such as restless legs syndrome following its acquisition of Noctrix.
The valuation looks attractive
According to CommSec, consensus earnings per share forecasts stand at $1.69 in FY27, $1.84 in FY28, and $1.98 in FY29.
At $31.89, the company trades on a PE ratio of just under 19 times forecast FY27 earnings.
By FY29, today's ResMed share price represents a little over 16 times expected earnings.
I think that looks cheap for a business expected to keep growing earnings while pursuing such an underpenetrated global market.
There are still risks. Competition, changes in treatment methods, healthcare reimbursement, and weaker-than-expected patient growth could all affect the outlook.
Foolish takeaway
What attracts me at $31.89 is the combination of a cheap valuation and a growth opportunity that still looks substantial.
ResMed already has global scale, but treatment penetration suggests there are many more patients still to reach.
With earnings also forecast to rise over the next few years, I think the current share price offers an attractive entry point for long-term investors.
