Pimco's not ready for the graveyard yet: Morningstar

PIMCO headquarters building in Newport Beach, Calif.
Scott Mlyn | CNBC

Bond giant Pimco remains bruised, but it was not broken following the departure of its high-profile founder in 2014, according to a Morningstar analysis.

The Newport Beach, California-based firm is nearing an important point, however, in that it has seen clients withdraw some $290 billion. That puts it near where Morningstar earlier had identified as a critical point when Pimco's profit margin would shrink in a meaningful way.

"We continue to have a cautiously optimistic outlook for Pimco's future," Morningstar said in a white paper it released Thursday. "We're encouraged at the progress the firm's leaders have made in stabilizing the investment team, fortifying the firm's culture, and continuing to invest in its research effort. Yet, the situation is fluid amid continued outflows and an investment team still in the formative stages of jelling and reforging its identity."

Investors have been watching the firm closely since the high-profile departure early in 2014 of co-CEO Mohamed El-Erian.

That scrutiny intensified when its founder, Bill Gross, jumped ship in September, after 40 years, for Janus Capital, a much smaller firm where he now manages an unconstrained fund. Outflows have plagued Pimco in general, but in particular its Total Return Fund, which until recently was the largest bond fund in the world before seeing its assets under management tumble to $107.3 billion.