Shares of ASML Holding (ASML 2.04%) -- the only provider of manufacturing equipment to produce  extreme ultraviolet (EUV) lithography machines used in the most advanced chipmaking -- were white-hot in the first half of 2023. Then a short slump set in, followed by a resurgence in recent weeks back toward all-time highs not seen since late 2021. ASML's fourth-quarter 2023 earnings report can be thanked for that.

However, the stock is back at a high-premium price tag, and management is taking a muted view on the outlook for 2024 financial performance. Is now really a good time to buy?

An end to the semiconductor downturn means more cash for ASML

There were three reasons investors were taking a more cautious stance on the Netherlands-based company a few months ago.

First, the company had been sitting on a record 30.7 billion euros ($33.5 billion) in equipment orders entering 2023. However, as semiconductor manufacturing partners managed through a downturn this past year, new orders only trickled in at a few billion euros per quarter since then, dwindling down to just €20 billion ($21.8 billion) at the end of 2023.

However, as it has become increasingly clear that the next upcycle in semiconductor sales is beginning, customers ramped up their order activity in the fourth quarter. ASML reported a record $10 billion in orders to close out the year.

Second, as ASML enjoyed significant growth this past year (full-year 2023 revenue increased 30% from 2022), free cash flow has been a bit meager since the company has invested heavily to expand its manufacturing capabilities. Free cash flow was just $3.59 billion in 2023, down dramatically from $7.86 billion in 2022.

But again, dramatic improvement came in the fourth quarter, with ASML generating nearly all of its free cash flow for 2023 in the final months of the year as some of those investments began to pay off.

And third, management has been pretty clear that 2024 would be a "transition year" after its big jump in sales last year. Sure enough, chief financial officer Roger Dassen said that 2024 revenue will merely be "similar to 2023." In other words, that means little to no growth.

However, it was also reiterated that 2025 could have "significant growth" in store because the current semiconductor industry recovery is only just beginning to take hold.

The market is clearly getting excited and has sent the stock soaring once more.

Time to buy ASML stock?

After the earnings update, ASML is now valued at a market cap of $334.1 billion, which means it carries a price tag of 93 times trailing 12-month free cash flow, or about 40 times trailing 12-month earnings per share.

It's a steep premium, but one that could improve (especially on a free-cash-flow basis) over the course of the next year if the company's equipment-capacity investments taper off. But really, investors are already eyeing the promise of a monster 2025, when sales and profitability could soar during the next full-on semiconductor bull market.

After yet another run higher, I still think it's time to pause and wait before buying ASML at these levels. This is a top semiconductor industry investment, one integral to all sorts of computing-technology trends today, so I'm happy to hold the shares I have and wait for a pullback as 2024 gets rolling.