A higher P/E could indicate either of the following: High confidence in the company, i.e. investors maybe expecting high future earnings of the company or they may believe that the company is on a high growth path. Highly overpriced stock, i.e. it could just be possible that stock is overpriced leading to high P/E with no significant justification for such high P/E. This is quite a possibility since the market prices are mostly sentiment driven.
