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SecureWorks is poised to end the longest drought in technology initial public offerings in seven years, but whether others will soon follow is an open question.

SecureWorks, the cybersecurity arm of Dell Inc., is set to price its shares after markets close Thursday in what would be the first tech IPO in four months.

Investors and other technology companies will be watching closely for an indication of the health of an IPO market that has struggled mightily this year, but lately has shown signs of life.

In an ominous sign, SecureWorks shares are expected to price at the low end of the $15.50 to $17.50 range the company is targeting, or possibly below it, according to people close to the deal. In its so-called roadshow presentations for potential investors, the company has met skepticism due to its lack of profitability and the recent poor performance of its peers, according to people who are considering buying shares in the IPO.

Still, SecureWorks isn't saddled with a rich private-market valuation like some Silicon Valley startups, and that could help smooth its entry into the public markets. Even if the shares price slightly below expectations, a decent trading performance Friday would continue a recent string of successful recent debuts and may pave the way for other companies—both within and outside tech—to tap the public markets.

Shares of the first major company to debut this year, Bats Global Markets Inc., which started trading last Friday, are more than 20% above their IPO price even after underwriters priced them at the high end of their targeted range and added more to the offering. MGM Growth Properties LLC, a real-estate investment trust that raised more than $1 billion, started trading Wednesday and closed up nearly 5% after pricing at the high end of its target range.

To be sure, the IPO market has a big hole to dig out of.

The first quarter was the slowest since 2009, hurt by a spasm of broader market uncertainty. The tech industry, traditionally the engine of the IPO market, has been hit particularly hard, in part by private-market valuations many investors see as inflated.

No other tech firm has listed shares in the U.S. since a small Chinese company did so in mid-December. That makes for the longest drought since the period between November 2008 and April 2009, according to Dealogic.

Part of the problem is that investors' patience for loss-making companies has thinned. Many that tapped the IPO market early last year and in 2014 could find interest as long as they had a clear path to profits. That is no longer the case.

A number of closely watched tech IPOs of the past two years are trading below their IPO prices, including Hortonworks Inc., Etsy Inc., and Box Inc.

"The companies that go out in the near-term are going to be profitable or have a near-term path to profitability," said Kristin DeClark, head of technology equity capital markets at Deutsche Bank AG. Investors want assurance that a company is funded until it can break even and won't be forced tap the equity market again soon, she said.

In its prospectus, SecureWorks warns potential investors that it has a history of losses and may not achieve or maintain profitability. The company generated $72.4 million in net losses in fiscal 2016, compared with $38.5 million the year before.

Cybersecurity stocks have also performed poorly in 2016, continuing declines that began in the second half of last year.

"Investors got overly excited" about cybersecurity stocks in 2014 and 2015 after a series of prominent data breaches, said Israel Hernandez, senior portfolio analyst at Columbia Threadneedle Investments. The growth that was implied by the high valuations "didn't quite materialize."

The cyber security ETF, PureFunds ISE Cyber Security Exchange-Traded Fund has lost 9.5% in 2016.

SecureWorks isn't a perfect bellwether for the current tech IPO market. It's different from many private tech companies in Silicon Valley, as it was founded during the last tech boom and is housed inside a large, established corporate parent.

But a successful debut could still help break a logjam formed by many of those billion-dollar startups that have been waiting in the wings.

Dell parent Denali Holding Inc. is aiming to sell 9 million shares of SecureWorks in an offering that would raise $149 million at the midpoint of the price range. The offering is part of an overhaul of the PC maker that includes its $67 billion pending acquisition of EMC Corp.

SecureWorks is to trade on the Nasdaq exchange under the symbol SCWX. The deal is being underwritten by a group of banks including Bank of America Corp., Morgan Stanley, Goldman Sachs Group Inc. and J.P. Morgan Chase & Co.

Write to Maureen Farrell at maureen.farrell@wsj.com and Corrie Driebusch at corrie.driebusch@wsj.com

(END) Dow Jones Newswires

April 21, 2016 11:55 ET (15:55 GMT)

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